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White House lauds efforts to make college affordable

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Initiatives put into place by President Barack Obama to make college more affordable would be jeopardized under a budget blueprint agreed to by congressional Republicans, according to a new White House report​.

The budget plan approved by Republicans in the House and Senate last week “would eliminate $90 billion in dedicated Pell Grant funding and let the American Opportunity Tax Credit (AOTC) expire after 2017 – resulting in a tax increase on millions of students and families,” the report said.

It added that the proposed Republican budget "does nothing to end the harmful effects of sequestration, capping discretionary funding for education and other key areas we need to strengthen the economy and expand opportunity.”

The administration released the report the day before the president is scheduled to give the commencement address ​at a public two-year college in South Dakota.

Keeping college affordable  

The report lists how much money each state received in Pell Grants in 2015-16 compared to the amount they received in 2008-09. It also lists for each state the amount received under AOTC, the number of families receiving the tax credit and the average credit received per family.

Taken together, Pell Grants and AOTC will provide to students and families $50 billion next year. As a result of these investments – and despite deep cuts to higher education in many states – student costs have fallen at four-year colleges and remained constant at community colleges.

Under the president’s America’s College Promise proposal, which would make two years of community college free for responsible students, the average full-time student could save $3,800 a year, according to the report. 

“This proposal will require everyone to do their part,” it said. “Community colleges must strengthen their programs and increase the number of students who graduate, states must invest more in higher education and training, and students must take responsibility for their education, earn good grades, and stay on track to graduate.”

Breaks for student borrowers

The report outlines steps already taken by the White House – and new proposals – to make college more affordable:

  • The maximum Pell Grant was increased to $5,775 for 2015-16. Since the start of the Obama administration, the maximum Pell award rose by more than $1,000, the number of Pell recipients increased by 33 percent and total aid available increased by 70 percent.
  • Reforms of the student loan program in 2010 ended subsidies for private financial institutions, shifted $60 billion in savings to students and families, and ensured that maximum Pell awards are adjusted for inflation annually. Those adjustments are set to expire in 2017.
  • AOTC is expected to provide a total of $18 billion in tax credits to 10 million families in 2016, with the average family receiving about $1,800. Obama has proposed making AOTC permanent, indexing the credit for inflation, expanding eligibility to part-time students, increasing the refundable portion to $1,500 and allowing students to claim the credit for up to five years.
  • Additional student loan repayment options help make student debt more manageable for borrowers. New borrowers can cap their loan payments at 10 percent of their income. New regulations expected to be published in December will add up to 5 million more borrowers under the Direct Student Loan program.
  • The White House is proposing a new American Technical Training Fund​ to support innovative, evidence-based job training programs, building on the success of the $2-billion Trade Adjustment Assistance Community College and Career Training program
  • The President proposed to expand the First in the World program, which supports higher education innovations to improve the outcomes for disadvantaged students, from $75 million in 2014 to $200 million.