When President Obama spoke at the University of Michigan, he expanded on some of the proposals on college affordability that he outlined in the State of the Union address.
Obama spoke to some crowd well over 3,000 Michigan students in the event making clear his desire to adapt federal aid programs so that they can stem rising tuition rates across the nation, writes John Irwin at Central Michigan Life.
\”If (colleges) can\’t stop tuition from going up, then the funding (they) receive from taxpayers each year will go down. We should push colleges to complete better,\” Obama said.
\”We should hold them accountable if they don\’t.\”
Under the brand new plan, colleges and universities that persistently raise tuition fees might find their federal aid cut.
\”We\’re telling the states if you can bring down the cost of college and discover ways for more students to graduate – we will give you additional federal support,\” Obama said.
Obama described the proposal as a \”Race to the Top program for school affordability\”. States who invest more in affordable advanced schooling initiatives will be rewarded with more federal support.
CMU Political Science Professor James Hill believes the importance of a greater education vastly outweighs any fears about expense:
\”While I am always conscious of the cost of new government initiatives, if there is a promising investment to make with positive long-term potential, it\’s in education,\” Hill said.
However, Daniel de Vise in the Washington Post believes that judging colleges on their affordability may not be as easy as it may sound.
The aid that might be lost wouldn\’t be the Pell grant, the largest source of federal funds to students, but a bundle of \”campus-based\” programs. They include Federal Work Study, which subsidizes the expenses of campus jobs for needy students at 3,400 colleges; Supplemental Educational Opportunity Grants, which supplements a federal grant by between $100 to $4,000 per student a year; and the Perkins loan program, which supplies low-interest loans to students.
And while Obama looks to expand these programs by $10 billion between them, colleges penalized underneath the president\’s plan would see their share of the cut.
However, critics from the proposal suggests that Obama\’s idea \”does smack of price controls.\”
Molly Corbett Broad, president from the American Council on Education in Washington, believes this technique might be seen as intrusive by the public.
An across-the-board cap on tuition increases \”favors expensive institutions,\” said Terry Hartle, senior v . p . of the American Council on Education.
The proposal \”appears to penalize institutions which have had really low tuitions in the past,\” he explained.
Since the 2008 downturn, legislatures in states like Virginia, Texas and California have steadily chipped away at state contributions to raised education, forcing colleges to boost tuition compared to the cuts.
De Vise uses the example of the Virginia Commonwealth University, who in 2010?raised tuition by 24 percent. The hike was as a result of gaping budget shortfall because of dwindling funds in the state.
\”Public university systems don\’t generally raise tuition for just about any other reason than to balance their budgets,\” said de Vise.
Peter McPherson, president from the Association of Public and Land-grant Universities, said:
\”I think it simply is impractical to punish if you don\’t take into consideration state appropriations.
\”I mean, how would you react in California now? What would you do in Texas and Michigan?\”
Below may be the full text of the President\’s remarks in Michigan:
THE PRESIDENT:? Hello, Michigan!? (Applause.)? Oh, it\’s good to be back in Ann Arbor.? (Applause.)
Thank you, Christina, for that introduction.? I additionally want to thank your president, Mary Sue Coleman.? (Applause.)? The mayor of Ann Arbor, John Hieftje, is here.? (Applause.)? My outstanding Secretary of Education, Arne Duncan, is incorporated in the house.? (Applause.) We have some outstanding people in Congress who\’re here as well, who are representing you on a daily basis.? Give them a round of applause — come on.? (Applause.)
AUDIENCE MEMBER:? I love you, President Obama!
THE PRESIDENT:? I love you back.? (Applause.)
So when it comes to — boy, we’ve got all kinds of members of Congress here, so — (laughter.)
Where’s Denard?? (Applause.)? Denard Robinson is in the house.? (Applause.)? I hear you’re returning, man.? (Applause.)? That is a good deal for Michigan.? (Applause.)
AUDIENCE MEMBER:? Denard Robinson in 2012!? (Laughter.)
THE PRESIDENT:? Oh, oh, come on.? They’re attempting to draft you for President.? (Laughter.)? He’s got to graduate before he runs for President.? (Laughter.)? There’s a time limit.? (Laughter.)
Well, it is wonderful to become here.? I wish to thank all of you for coming out this morning.? I know for folks in college, this is still really early.? I remember those days.? It is good home — good to be in the home of the Sugar Bowl champion Wolverines.? (Applause.)? With Denard Robinson returning, this will be a group to be reckoned with.? I realize your basketball team is pretty good this year, too.? (Applause.)? Okay — go, Blue!? (Applause.)? It’s always good to start with a easy applause line.? (Laughter.)
But the reason I’m here today — in addition to meeting Denard Robinson — (laughter) — would be to talk with everyone about what the majority of you do here every day — and that is to consider how you can gain the skills and the training you have to succeed in this Twenty-first century economy.? And this is going to be one of the most important problems that not just you face, however this entire country faces:? How can we make sure that everyone is getting the type of education they have to personally succeed but also to build up this nation — because in this economy, there is no greater predictor of person success than a good education.
Today, the unemployment rate for Americans with a college degree or even more is about half the national average.? Their incomes are two times as high as those who don\’t have a high school diploma.? College is the single most important investment you may make in your future.? And I’m proud that all of you are earning that investment.? (Applause.)
And the degree you earn from Michigan will be the best tool you need to achieve that basic American promise — the concept that if you strive, if you are applying yourself, if you are doing what\’s right, you can do well enough to raise a household and possess a home and send your personal kids to school, put away a little for retirement, create services or products — be part of something which is adding value to this country and perhaps changing the planet.? That’s what you’re pursuing.? That’s what the American Dream is all about.
And how we keep that advertise alive is the defining issue of our time.? I don\’t want to be in a country where we simply are looking at success for any small group of people.? We want a country where everybody has a chance.? (Applause.)? Where everybody has a chance.? We don’t want to become a country where a shrinking number of Americans do really well while a growing number barely manage.? That\’s not the near future we want.? Not the future I want for you personally, it’s not the near future I want for my daughters.? I want this to become a big, bold, generous country where everybody receives a fair shot, everybody is doing their great amount, everybody is playing by the same algorithm.? That\’s the America I know.? That\’s the American I wish to keep.? That’s the future within our reach.? (Applause.)
Now, within the State from the Union , I laid out a blueprint that will get us there.? Blueprint — it’s blue.? (Laughter and applause.)? That’s no coincidence.? I planned it this way, Michigan.? (Laughter.)? A blueprint for an economy that\’s created to last.
It\’s an economy built on new American manufacturing — because Michigan is all about making stuff.? (Applause.)? If there’s anybody in the usa who can teach us how you can bring back manufacturing, it is the great state of Michigan.? (Applause.)
On your day I took office, with the help of folks like Debbie Stabenow, your senator, and Carl Levin and — (applause) — John Conyers — the American auto industry was on the verge of collapse.? Plus some politicians were prepared to let it just die.? We said no.? We believe in the workers of this state.? (Applause.)? I believe in American ingenuity.? We placed our bets around the American auto industry, now, the American auto industry is back.? Tasks are coming back — (applause) — 160,000 jobs.
And to bring back even more jobs, I want this Congress to stop rewarding firms that are shipping jobs and profits overseas, start rewarding companies who\’re hiring here and investing here and creating good jobs here in Michigan and here in the United States of the usa.? (Applause.)
So our initial step is rebuilding American manufacturing.? Oh and, not all the jobs that have gone overseas are likely to come back.? We must be realistic.? And technology implies that a larger and larger portion of you\’ll work in the service sector as engineers and computer scientists.? (Applause.)? There you go.? We got the engineering school — there you go.? (Applause.)? And entrepreneurs.? So there\’s likely to be a lot of activity in the service sector.? But part of my argument, part of the argument of Michigan\’s congressional delegation is that when manufacturing does well, then the entire economy does well.
The service sector does well if manufacturing does well, so we will need to make sure that America isn\’t just buying stuff, but we\’re also selling stuff — all around the world, products stamped with those three proud words:? Produced in America.? (Applause.)
An economy created to last can also be one where we control our energy needs.? We don’t let foreign countries control our energy supplies.? Right now, America is producing much more of our own oil than i was eight years back.? That’s great news.? (Applause.)? As a percentage, we\’re actually importing under any time in the last 16 years.
But — I believe young people especially appreciate this — no matter how much oil we produce, we\’ve only got 2 percent from the world\’s oil reserves.? And that means we will need to focus on clean, alternative energy.? (Applause.)? We\’ve got to have a strategy that, yes, is producing our very own oil and gas.? But we\’ve also got to develop wind and solar and biofuels.? (Applause.)
And that\’s good for our economy.? It makes jobs.? But it\’s also good for our environment.? (Applause.)? It also makes sure that the earth is sustainable.? That\’s part of the future that you deserve.
We’ve subsidized oil companies for any century.? That\’s of sufficient length.? Congress must stop giving taxpayer dollars for an oil industry that\’s never been more profitable, and double recorded on a clean energy future that\’s never been more promising.? (Applause.)
I don\’t wish to cede the wind or even the solar or the battery industry to China or Germany because i was too timid, we did not have the imagination to make the same commitment here.? And that i want those jobs created within the United States of the usa.? And I also want us to consider energy efficiency, making sure — we\’ve already doubled fuel efficiency standards on cars.? A part of Detroit coming back is making more fuel-efficient cars here in Michigan — (applause) — and more fuel-efficient trucks.? And we will need to revamp our buildings to ensure they are more fuel-efficient.
And we — if we are focused on this, we are able to control our energy future.? That\’s part of creating an America that\’s built to last.
And we\’ve got to have an economy by which every American can access a world-class advanced schooling, the kind you are getting right here in the University of Michigan.? (Applause.)
My grandfather got the opportunity to go to college because this country decided that every returning veteran of World War II should be able to afford it.? My mother was able to raise two kids by hand because she could get grants and work her way through school.? I am only standing here today because scholarships and student education loans gave me a shot in a decent education.? Michelle and I can still remember just how long it took us to repay our student education loans.? (Laughter.)
AUDIENCE MEMBER:? Tell the very first Lady you want her happy birthday!
THE PRESIDENT:? I will tell Michelle you said happy birthday.? (Applause.)
But Among the finest all of you to know, your President and your First Lady were inside your shoes not too long ago.? (Laughter.)? We didn\’t come from wealthy families.? The only real reason that i was able to achieve what we were able to achieve was because we\’ve got a great education.? This is the only reason.? (Applause.)? And that we could not have done that unless we lived inside a country that made a commitment to opening up opportunity to all people.? (Applause.)
The point is, america has always made a commitment to place a good education within the reach of all who are prepared to work for it, and that\’s part of what helped to produce this economic miracle and make the largest middle class in history.
And this precedes even college.? I am talking about, we were — we helped to begin the movement in industrialized countries to create public schools, public high schools, knowning that as individuals are moving from an agricultural sector to an industrial sector, these were going to need training.
Now we’ve gone to live in an information age, a digitalized age, a global economy.? We’ve reached make that same commitment today.? (Applause.)
Now, we have, by far, the best network of colleges and universities in the world.? Nobody comes close.? Nobody comes close.? (Applause.)? But the challenge is it’s getting harder and harder to afford it.? Since most of you were born, tuition and fees have more than doubled.? That forces students like you to take out more loans and rack up more debt.
In 2010, graduates who took out loans left college owing an average of $24,000.? That’s a typical.? Are you waving because you owe $24,000 or — (laughter.)
Student loan debt has now surpassed credit debt for the first time ever.? Think about that.? That\’s inexcusable.? In the coming decade, 60 percent of new jobs will need more than a high school diploma.? Higher education is not a luxury.? It’s an economic imperative that each family in the usa should be able to afford.? And when I say higher education, I don’t just mean four-year universites and colleges; I also mean our vocational schools and providing lifelong learning for workers who might need to retrain for jobs when the economy shifts.? All those things have a price, and it’s harder and harder to afford.? (Applause.)
So we’ve got to do something to help families have the ability to afford — and students to be able to afford — this higher education.? We’ve all got a responsibility here.
Thanks to the hard work of Secretary Duncan, my administration is increasing federal student aid so more students are able to afford college.? (Applause.)? And one of the things I’m proudest of, with the aid of all these people in Congress, we won a tough fight to stop handing out tens of vast amounts of dollars in taxpayer subsidies to banks that issue student education loans and shift those funds to where it should go, straight to the students and also to the families who require it.? (Applause.)
Tens of vast amounts of dollars that were going to subsidies for banks are now going to students in the form of more grants and lower rates on loans.? We\’ve capped education loan payments so that nearly 1.Six million students — including a bunch of you — are only going to have to pay 10 % of your monthly income towards your loans when you graduate — 10 percent of your monthly income.? (Applause.)
So that\’s what we\’ve been doing.? Now Congress needs to do more.? Congress must do more.? They have to stop the rates of interest on student loans from doubling this July.? That’s what\’s scheduled to happen if Congress doesn’t act.? That will not be healthy for you.? (Laughter.)? Which means you should enable your members of Congress know:? Don’t do that.? Don’t get it done.? Don’t get it done.
They need to extend the tuition tax credit that we\’ve put in place that\’s saving some of you and countless folks all across the country 1000s of dollars.? And Congress needs to give more young people the chance to earn their way through college by doubling the amount of work-study jobs in the next five years.? (Applause.)
So the administration includes a job to do.? Congress has a job to do.? But it\’s not just enough to improve student aid, and you can imagine why.? Look, we can\’t just continue subsidizing skyrocketing tuition.? If tuition is going up faster than inflation, faster than even healthcare is going up, no matter how much we subsidize it, eventually, we\’re going to exhaust money.? Which of course means others have to do their part.? Colleges and universities need to do their part to keep costs down as well.? (Applause.)
Recently, I spoke with a group of college presidents who\’ve done just that.? Here at Michigan, you\’ve done a lot to find savings inside your budget.? We know this is possible.? So from now on, I\’m telling Congress we should steer federal campus-based aid to those colleges that keep tuition affordable, provide value, serve their students well.? (Applause.)? We are putting colleges on notice — you cannot keep — you can’t assume that you\’ll just raise tuition every single year.? If you can\’t stop tuition from rising, then the funding you get from taxpayers each year will go down.? We should push colleges to do better.? We should hold them accountable when they don\’t.? (Applause.)
Now, states also have to do operator.? I was speaking with your president — and this is true all across the country — states have to do their part by making higher education a higher priority in their budgets.? (Applause.)? This past year, over 40 states cut their advanced schooling spending — 40 states cut their higher education budget.? And we know that these state budget cuts happen to be the largest element in tuition increases at public colleges over the past decade.
So we\’re challenging states:? Take responsibility as well about this issue.? (Applause.)? What we\’re doing is, today we\’re going to launch a Race to the peak for college affordability.? We\’re telling the states, if you can find new methods to bring down the cost of college making it easier for more students to graduate, we\’ll assist you to do it.? We\’ll give you additional federal support if you\’re doing a good job of making sure that everyone aren\’t loaded up with debt when you graduate from college.? (Applause.)
And, finally, today I\’m also with a new report card for colleges.? Parents like getting report cards.? I know you guys may not always look forward to it.? (Laughter.)? But we parents, we like to know what you\’re doing.? In the future, parents and students should know how a college is doing — how affordable could it be, how well are its students doing?? We would like you to know how well a car stacks up before you buy it.? You should know how well a college stacks up.
We refer to this as — one of the things that we are doing in the Consumer Finance Protection Board which i just set up with Richard Cordray — (applause) — is to make sure that young people understand the financing of colleges.? He calls it, \”Know Before You Owe.\”? (Laughter.)? Know before you owe.? So we want to push more details out so consumers could make good choices, so you as consumers of higher education know very well what it is that you\’re getting.
The bottom line is that an economy created to last demands we carry on doing everything we are able to to bring down the cost of college.? That goes along with strengthening American manufacturing.? This means we continue investing in American energy.? This means we double down on the clean energy that\’s creating jobs across this state and guaranteeing your generation a much better future.? (Applause.)
And you know what else it means?? It means that people renew the American values of fair play and shared responsibility.? (Applause.)? Shared responsibility.
I discussed this in the State from the Union.? We will need to make sure that as we\’re paying for the investments of the future that everybody is doing their part, that we\’re looking out for middle-class families and not just those at the very top.? The first thing that means is ensuring taxes don\’t increase on 160 million working Americans after next month.? (Applause.)? People can not afford to lose $40 from every paycheck.? Wrong now.? Students who\’re working certainly can not afford it.
Your voices encouraged and ultimately convinced Congress to increase the payroll tax cut for two months.? Now we will need to extend it for the entire year.? I need your help to get it done again.? Tell them to pass this tax cut, without drama, without delay.? (Applause.)? Get it done.? It\’s good for the economy.? (Applause.)
AUDIENCE MEMBER:? Four more years!
THE PRESIDENT:? Okay.? (Laughter and applause.)
Now, within the longer run, we\’re also going to need to reduce our deficit.? We\’ve got to invest in our future and we will need to reduce our deficit.? And to do both, we\’ve got to make some choices.? Allow me to give you some examples.
Right now, we\’re scheduled to invest nearly $1 trillion more on what was intended to be a temporary tax cut for the wealthiest 2 percent of Americans.
AUDIENCE MEMBER:? That’s not fair.
THE PRESIDENT:? That’s not fair.? One fourth of all millionaires pay lower tax rates than countless middle-class households.
AUDIENCE:? Booo –
THE PRESIDENT:? Not fair.? Warren Buffett pays a lesser tax rate than his secretary.? I know because she was at the State of the Union.? She explained.? (Laughter.)? Is the fact that fair?
THE PRESIDENT:? Will it make sense for you?
THE PRESIDENT:? Will we want to keep these tax cuts for folks like me who don\’t need them?? Or will we want to purchase the things that will let us in the long term — like student education loans and grants — (applause) — along with a strong military — (applause) — and take care of our veterans — (applause) — and research?? (Applause.)
Those are the choices we’ve got to make.? We can’t try everything.? We can’t reduce our deficit making the investments we want at the same time, and keep tax breaks for those who don’t need them and weren’t even asking for them — well, some of them were asking for them.? I wasn’t requesting them.? (Laughter.)? We’ve reached choose.
When it comes to paying our fair share, I believe we ought to follow the Buffett Rule:? If you make more than $1 million annually — and I hope a lot of you do once you graduate — (laughter) — then you should pay a tax rate with a minimum of 30 percent.? (Applause.)? However, if you decide to go into a less lucrative profession, if you decide to become a teacher — and that we need teachers — (applause) — if you decide to go into public service, if you decide to go into a helping profession — (applause) — if one makes less than $250,000 annually — which 98 percent of american citizens do — your taxes shouldn\’t go up.? (Applause.)
This is part of the idea of shared responsibility.? I understand a lot of folks happen to be running around calling this class warfare.? I think asking a billionaire to pay at least as much as his secretary in taxes is simply common sense.? (Applause.)? Yesterday, Bill Gates said he doesn’t think people like him are paying enough in taxes.? I promise you, Warren Buffett does fine, Bill Gates is doing fine, I\’m doing fine.
AUDIENCE MEMBER:? Koch Brothers.
THE PRESIDENT:? They’re definitely doing fine.? (Laughter.)
We don’t need more tax breaks.? There are a lot of families out there who are struggling, who\’ve seen their wages stall, and the cost of everything from a college education to groceries and food have gone up.? You\’re the ones who need that.? You are the ones who require help.? And that we can’t do both.
There have been some who\’ve been saying, well, the only real reason you\’re stating that is because you’re attempting to stir people up, make them envious of the rich.? People don’t envy the rich.? When people talk about me paying my great amount of taxes, or Bill Gates or Warren Buffett paying their great amount, the reason that they’re talking about it is because they do know that when I recieve a tax break which i don’t need, the country can’t afford, then one of two things are going to happen:? Either the deficit goes up and ultimately you guys will have to pay for it, or else, somebody else will foot the bill — some senior who suddenly has to pay more for his or her Medicare, or some veteran who’s not receiving the help that they need readjusting once they have defended america, or some student who\’s suddenly spending higher rates of interest on their student loans.
We do not begrudge wealth within this country. ?I would like everybody here to complete well.? We desire to financial success.? But we understand that we aren\’t successful simply by ourselves.? We\’re successful because somebody started the University of Michigan.? (Applause.)? We\’re successful because somebody made an investment in all the federal research labs that come up with Internet.? We\’re successful because we have an outstanding military — which costs money.? We\’re successful because somebody built roads and bridges and laid broadband lines.? Which things didn\’t just happen by themselves.
And if we all understand that we\’ve got to purchase this stuff, it makes sense for those of us who’ve done better to do our great amount.? And to attempt to pass off that bill onto someone else, that\’s not right.? That\’s not who we\’re.? (Applause.)? That\’s not what my grandparents’ generation worked hard to pass down.? That\’s not what your grandparents as well as your great-grandparents worked hard to pass through down.? We have a different concept of America, a more generous America.? (Applause.)
Everybody here\’s only here because somebody somewhere in the future decided we will think not just about ourselves, but about the future.? We\’ve got responsibilities, yes, to ourselves but also to each other.? And now it\’s our use be responsible.? Now it\’s our use leave an America that\’s created to last.? And I know we can do it.? We\’ve tried it before and I know we are able to do it again due to you.
When I meet young people all across america, with energy and drive and vision, despite the fact that you\’ve come old during a difficult, tumultuous time in this world, it provides me hope.? You inspire me.? You\’re at Michigan since you believe in your future.? You\’re spending so much time.? You\’re investing in long hours — hopefully some at the library.? (Laughter.)? Some of you are balancing a job at the same time.? You will know doing big things is not always easy, but they\’re not giving up.
You\’ve got the whole world before you.? And also you embody that sense of possibility that is quintessentially American.? We don\’t shrink from challenges.? We stand up to them.? And that we don\’t leave people behind; we make sure everybody comes with us on this journey that we\’re on.? (Applause.)
That\’s the spirit at this time that we need, Michigan.? (Applause.)? Here in America, we do not give up.? We look out for every other.? We make sure everybody has an opportunity to get ahead.? And if we work in common purpose, with common resolve, we can build an economy that gives everybody a good shot.? And we\’ll remind the world just why it is that the United States of America is the greatest nation on the planet.? (Applause.)
Thank you, everybody.? God bless you.? God bless america of America.? Thanks.? (Applause.)