President Obama is on a two-day bus tour in the Northeast.
(Photo: Charles Dharapak, AP)
BUFFALO - President Obama opened a two-day bus trip Thursday by outlining a revamped education plan that seeks to tie federal aid to college costs.
"We can't price the middle class - and people working to get into the middle class - out of a college education," Obama said during a speech at the New York state university in Buffalo.
President Obama proposed a ratings system to assess how hard colleges are working to keep down costs; federal aid would be based on a school's frugality ratings under a proposal that would require congressional approval.
A higher education is the single best investment you can make in your future," President Obama told students in Buffalo, but the high costs and debt have become "a barrier and a burden for too many American families."
In addition to pressuring colleges over costs via a new ratings system, President Obama said his plan has two other goals: encouraging schools to innovate and compete for students, and helping students manage their loan debts.
The plan calls on colleges to disburse student aid over the course of a semester, rather than as a lump sum at the start. Colleges would receive bonus money for the number of Pell Grant students who graduate.
As for the ever-growing levels of student debt, the plan calls for expansion of a "Pay As You Earn" program that would cap loan repayments at 10% of income.
The plan also says that colleges should offer a greater range of "affordable, high-quality options" that will generate competition with other colleges and drive down prices.
President Obama pointed out that much of his plan - including the proposal to tie federal funding to the new ratings - would require congressional approval, and "we're going to have to work on that."
Rep. Ron Kline, R-Minn., who chairs the House Committee on Education and the Workforce, said he is "concerned that imposing an arbitrary college ranking system could curtail the very innovation we hope to encourage, and even lead to federal price controls."
The college speech was the latest in a recent series on the middle class that President Obama has delivered in recent months. President Obama said that the rising costs of colleges - and the accrued debt needed to finance them - are hurting efforts by graduates to enter the middle class.
The average tuition cost at a four-year public college has increased by more than 250% over the past three decades, according to the White House. Meanwhile, incomes for typical families grew by 16%.
The federal government provides about $150 billion per year in student financial aid, the administration said, while states contribute $70 billion to public colleges and universities.
Obama speaks later Thursday at a high school in Syracuse, N.Y.
The latest presidential bus tour takes place amid turmoil in foreign affairs, including calls on President Obama to take forceful action on the possible use of chemical weapons in Syria and the crackdown on protesters by the military government in Egypt.
President Obama is also gearing up for a major budget battle in September with congressional Republicans, one that could lead to a government shutdown.
During his Buffalo speech, President Obama said college students, parents and other middle-class Americans can't afford "the usual circus of distractions and political posturing" over the budget, health care, and other issues.
"That won't grow our economy," Obama said. "That won't create jobs. That won't help our middle class."
The Republican National Committee branded Obama's latest trip as a "Lame Duck Bus Tour" with little substance to talk about.
"President Obama's record with youth is wrought with failures from college costs to student loan debt, and his economy has made it difficult for young Americans to prosper," said RNC spokeswoman Kirsten Kukowski.
The bus tour wraps up Friday with a town hall in Binghamton, N.Y., and a speech at a college in Scranton, Pa. The latter event will feature Vice President Biden, a Scranton native.