President Barack ObamaObama Emphasizes Tuition Restraint

President Barack Obama called for federal reforms to address college affordability during a

Jan. 27 speech in Ann Arbor. He proposes offering incentives to schools that exercise tuition restraint and shifting aid away from those that don’t.

“We are putting colleges on notice,” said Obama. “You can’t assume that you’ll just jack up tuition every single year. If you can’t stop tuition from going up, then the funding you get from taxpayers each year will go down.”

The campus-based aid package at the heart of his proposal includes Federal Work Study, Supplemental Educational Opportunity Grants and Perkins loans. Pell Grants would not be impacted. According to a White House fact sheet, Obama wants to implement a new formula for dispersing the package that rewards schools that “set responsible tuition policy, provide good value in education and ensure higher numbers of low-income students complete their education.” Colleges penalized could see reductions in aid or be denied a share of the additional $10 billion Obama proposes to invest in the three programs.

Based on national media coverage, the reaction from higher education has focused on how the federal government will determine what constitutes a “responsible tuition policy.” A cap on annual increases—no more than 3 percent, for example—would favor expensive institutions because the same percentage yields greater revenue when costs are higher.


Gavin Leach (Finance and Administration) said NMU has consistently ranked second-lowest in tuition and fees among Michigan’s public universities, all of which had to absorb a 15 percent, across-the-board cut in state appropriations this year. NMU raised tuition 7 percent for the current academic year.

“We’re always mindful of the cost to students and their families and remain committed to affordability,” he said. “Any effort to tie federal support to tuition should take into account declining state support for higher education because it puts increased pressure on the tuition side of the funding equation. At NMU, we have tried to relieve some of that pressure through internal cost-saving measures—about $15 million worth since 2003. But there’s only so much you can cut without diluting the quality of the students’ academic experience. Northern provides a good value in terms of net tuition and serves a relatively high proportion of low-income students who rely on federal aid, so our hope is that any proposal implemented by the president would not negatively impact the university.”

Congressional approval would be required for much of the plan, which also includes a College Scorecard that compares costs, graduation rates and potential earnings in an easy-to-read format designed to make the selection process easier for students and families.



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Updated: February 9, 2012

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