Warnings of Unintended Consequences

In his State of the Union speech Tuesday night, President Obama delivered a brief message to colleges and universities: they are "on notice," and risk losing some federal money if net tuition prices continue to increase.

Just as quickly, Obama moved onto the next policy proposal without providing any further detail, such as what would constitute “skyrocketing” tuition prices or what federal money might be yanked if colleges do not fight them.

Still, even the suggestion of using federal financial aid to force colleges to lower prices drew criticism from many higher education experts Wednesday. While they said it was difficult to judge a proposal that, so far, amounted to an applause line in a speech and a single sentence in a document the White House released afterward, many cautioned that the idea could have unintended consequences.

College affordability has become a popular theme for the Obama administration as the 2012 presidential race heats up. Until Tuesday night, though, the administration’s public appearances and private meetings centered largely on productivity: officials praised new methods of delivering higher education without attacking more traditional colleges and universities. Criticism of pricing and "value," a word the administration used in the "blueprint" outlining the president's proposed State of the Union policy, have been mostly relegated so far to the administration's (and Congress's) intensified scrutiny and regulation of for-profit institutions.

The State of the Union marked a shift. Obama reasserted the administration’s commitment to federal financial aid, but he said institutions and states would need to do their part. States should make higher education spending a higher priority, he said, while institutions should keep prices down.

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