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President's plan calls for earnings, employment info

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President Barack Obama addresses the audience at the University of Michigan on Friday. ​​

​President Barack Obama’s proposal to better control college tuition and provide more information to students and their families includes a “college scorecard” that would, in part, include the earnings and employment information of graduates.

Under the plan—released Friday prior to Obama’s speech at the University of Michigan—the scorecard required of all degree-granting institutions would provide college costs, graduation rates and potential earnings.

Information in the scorecards would also likely factor into whether colleges’ are providing a “good value” to students and families, which the administration wants to leverage in distributing federal student aid.

Higher education organizations are cautiously optimistic about the proposal, noting they are waiting to see further details. The American Association of Community Colleges (AACC) noted that many of the ideas would require congressional approval and will likely lay the administration’s groundwork for reworking the federal Higher Education Act, which is up for reauthorization next year.

Other higher education associations politely outlined potential concerns. Molly Corbett Broad, president of the American Council on Education, said even though “important details remain to be unveiled,” a central concern is that it will likely move decision-making in higher education “from college campuses to Washington, D.C.”

“In recent years, the federal government has increasingly inserted itself in the day-to-day operations of colleges and universities, including basic academic decisions,” she said in a statement.

Changes to campus-based aid

The president’s proposal noted that formulas to distribute campus-based aid—such as Supplemental Education Opportunity Grants, Perkins Loans and Work Study—are outdated, reward colleges for longevity in the program and provide no incentives to keep tuition costs low.

“Colleges that can show that they are providing students with good long-term value will be rewarded with additional dollars to help students attend,” the proposal noted. “Those that show poor value, or who don’t act responsibly in setting tuition, will receive less federal campus-based funding.”

Although AACC generally opposes tying student aid funding to institutional outcomes because it’s difficult to measure them across all colleges and universities, it agreed that campus-based funding needs revisiting. It noted that the formulas do not serve community college students well—they receive only 10 percent of the funding even though they represent nearly 45 percent of all students attending nonprofit higher education institutions.

Saving state funding

The president’s proposal also includes two programs to offer incentives to states and colleges to promote affordability and quality. A $1 billion Race to the Top: College Affordability and Completion initiative would encourage states to restructure state financing of higher education and better align K-12 and college standards. The administration would look for cost-saving innovations, such as redesigning courses and making better use of technology.

The initiative would call on states to “maintain adequate funding” for higher education. State higher education systems have been leery of federal involvement in areas of policy, financing and governance, but the federal government’s push to ensure that states retain adequate support for higher education is a “positive development,” AACC said in a review of the proposal.

“The long-time decline in state support for public higher education, as measured by the percentage of state budgets devoted to this function, needs to be reversed,” it said.

During a press call on Friday, U.S. Education Secretary Arne Duncan said many states are already reforming their education programs, but they need to commit to preserve funding for education, noting that a driving factor behind tuition increases is the slashing for state funding for higher education.

The president also wants to create a $55 million First in the World competition to allow colleges—including minority-serving institutions—and nonprofit organizations to develop, validate and scale up innovative and effective strategies to improve student success. Projects could address early preparation activities to reduce the need for developmental education and competency-based approaches to earning college credit.

The U.S. Education Department said it will provide details on how it proposes to fund the initiatives in its fiscal year 2013 budget proposal on Feb. 13.

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