Higher education reform has long been one of President Obama’s major priorities and it is one in which there is much work to be done, in particular to address the issue of rapidly rising costs. As part of an effort to deliver on his promises, Obama has proposed, among other things, to tie federal student financial aid to metrics such as colleges’ graduation rates, net tuition levels, and graduate debt and income. However, while Obama’s intentions may be good, his proposal would restrict choices for students who need federal aid and exacerbate their financial difficulties.
Tying financial aid to college ratings would coerce many students to choose colleges based on government-determined ratings. Using money as leverage, the federal government would reward students at highly-ranked schools and effectively penalize students for attending a lower-ranked institution instead. This would make it harder for students to attend institutions where, for instance, a large proportion of graduates enter into lower-paying fields like education or public service compared to schools focused on engineering or business. As University President Drew G. Faust argued, such a narrow approach to reform is “misguided.”
This program also threatens to devolve into a vicious cycle of funding reductions, reminiscent of the highly controversial No Child Left Behind Act. Colleges that perform well in the considered criteria would receive more federal grants and more affordable loans. In essence, schools that are already doing well would become even better off. As Vice President Joe Biden said regarding this policy, “You’re safe at Harvard.” Meanwhile, colleges that rank poorly would lose funding, making it even harder for them to finance their educational mission, leading in turn to even worse outcomes. Instead of helping to improve lagging schools and increase the value they provide to their students, Obama’s proposal would simply reinforce existing disparities.
Moreover, the burden of this policy would only fall on students who need financial aid. Wealthy families in essence would not be affected—their children would still be able to make college decisions freely regardless of how the government distributes federal aid. On the other hand, students who rely on such aid to attend college would be pressured even more to make decisions between schools because of financial concerns. These students may find that colleges they want to attend are now unaffordable because of a lack of federal aid for those colleges under this policy. Students receiving aid who already attend such colleges may face even more difficult financial circumstances as the money dries up.
Certainly, millions of families care about information such as college costs, debt, and future earnings. By itself, a publicly available resource like Obama’s online “college scorecard” with such comparative data is highly beneficial, allowing families to make more informed decisions about their children’s educations. However, forcing students’ financial aid to depend on this data is not. Such a policy is fraught with inequities and unwelcome coercion, harming the very people it is meant to help.
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