Obama Proposes New Affordability Rating For Colleges

COLUMBUS, OH - MAY 05: Ohio State Trustee David Horn (L) puts a sash on U.S. President Barack Obama during commencement ceremonies at The Ohio State University at Ohio Stadium on May 5, 2013 in Columbus, Ohio. Obama addressed the graduates a year from the day he kicked off his re-election campaign at the campus.The president was also given an honorary degree Doctor of Laws. (Photo by Matt Sullivan/Getty Images) (2013 Getty Images)

President Barack Obama unveiled a sweeping new plan on Thursday to help tackle the nation's student-loan debt crisis, which is twice as likely to affect Latino and African American students.

Under Obama's plan, the United States would begin to rate colleges based in part on affordability with the goal of eventually linking those ratings to federal financial aid awards.

The new ratings system, which the president wants implemented before the 2015 school year, would evaluate colleges on a series of measures, including average tuition and student loan debt, graduation rates, and the average earnings of graduates. Obama is also seeking legislation to link the new ratings system to the way federal financial aid is awarded, with students who attend highly-rated schools receiving larger grants and more affordable student loans.

"We are going to deliver on a promise I made last year - colleges that keep tuition down, providing higher education will see funding go up," Obama said at a basketball arena full of students at the University at Buffalo in New York on Thursday. "It's time to stop subsidizing schools not producing results, it's time to reward those schools providing opportunity for our future."

According to the Urban Institute, Hispanics and African Americans are about twice as likely to carry student loan debt: 34 percent of blacks and 28 percent of Hispanics have it, compared with 16 percent of whites and 19 percent of Asians-Americans.

Obama detailed the proposals Thursday as he opened a two-day bus tour through New York and Pennsylvania. The tour underscores the White House's desire to stay focused on domestic issues, even as foreign policy crises in Egypt and Syria vie for his attention.

"Bottom line, higher education can not be a luxury - every American family should be able to afford to get it - that's the problem," Obama said.

"Even with good jobs, it took Michelle and me a long time to pay off our student loans," said Obama, who finished paying his loans about nine years ago--when he was 43.

Throughout the summer, the White House has been seeking to keep the president's public agenda centered on middle-class economic issues as a way to rally public support for his positions ahead of looming fiscal battles with congressional Republicans. And Obama, in an email to supporters this week, said a big part of middle-class security includes fundamentally rethinking how to pay for higher education.

"Just tinkering around the edges won't be enough," Obama wrote. "We've got to shake up the current system."

Speaking to reporters aboard Air Force One, Education Secretary Arne Duncan said Thursday the middle class needs the security of knowing they can afford to send their kids to college.

"There's a growing sense that college is for the wealthy, for rich folks and not for hard-working people who are doing the right thing every day," he said.

The president's plan aims to better inform consumers and provide incentives for colleges and universities.

"We need much greater transparency for the public," Duncan said.

According to Obama administration estimates, average tuition costs at four-year public colleges have more than tripled over the last three decades. The average student loan borrower also graduates with more than $26,000 in debt.

The president will also propose legislation to give colleges a "bonus" based on the number of students they graduate who received Pell Grants. The goal is to encourage colleges to enroll and graduate low- and moderate-income students.

The administration will also seek to require colleges with high dropout rates to distribute student aid over the course of the semester -- as students face expenses -- rather than in a lump sum. The aim is to prevent wasting grant money by ensuring that students who drop out do not receive funds for time they are not in school.

"You want to see good actors be rewarded," Duncan said.

Obama is also renewing his call for a $1 billion college "Race to the Top" competition that would reward states that make significant changes in higher education policies while also containing tuition costs.

The bus trip unfolds as Obama also confronts a turbulent international scene, with tensions in Egypt and continuing bloodshed in Syria. The Syrian regime was keeping up a military offensive Thursday in eastern Damascus, where the opposition said the regime had killed over 100 people the day before in a chemical weapons attack.

White House spokesman Josh Earnest, aboard Air Force One, defended the president's decision to leave Washington despite the foreign challenges.

"As we're weighing these domestic policy positions and foreign policy decisions, the president puts the interests of the United States of America first," Earnest said. "The fact that we are doing this bus tour is an indication that the president has his priorities straight."

The backdrop for the president's rollout will be colleges and high schools throughout New York state and Pennsylvania. He was to hold his first event Thursday morning at the University of Buffalo before traveling by armored bus to Henninger High School in Syracuse, N.Y. The president will hold a town hall Friday at Binghamton University, then travel to Scranton, Pa., for an event at Lackawanna College.

Vice President Joe Biden, a Scranton native, is scheduled to join Obama in his hometown. Biden spent much of the week in Houston, where his son Beau underwent a medical procedure at a cancer center.

For Obama, who has made no secret of his desire to get out of Washington when he can, the bus tours have become a favorite method for reconnecting with the public. Beyond his official events, the president often makes unscheduled stops at local restaurants and businesses, and sometimes pulls off on the side of the road to greet cheering crowds.

In 2011, the Secret Service purchased a $1.1 million bus for Obama's first bus tour as president. The impenetrable-looking black bus has dark tinted windows and flashing red and blue lights.

Based on reporting by the Associated Press.