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Md. colleges have mixed reaction to Obama plan

Colleges and UniversitiesFinancial AidConsumersFinanceBarack ObamaPersonal Income

Some Maryland education officials lauded a presidential plan to make colleges more affordable by assigning them value ratings tied to federal financial aid, yet others feared the state's historically black colleges and universities would suffer.

The reactions came Thursday as officials tried to determine what President Barack Obama's proposal might mean for their institutions.

"The devil, of course, can be in the details," said Dennis O'Shea, a spokesman for the Johns Hopkins University, in a statement. "And in this case, the details haven't been written yet."

Obama broadly outlined the plan Thursday at the University of Buffalo in New York, the first stop of a two-day bus tour promoting the proposal.

It calls for a rating system to be in place by 2015, ranking higher education institutions based on factors including cost, graduation rates, percentage of low-income students and how well graduates do in the work force.

The ratings would be tied to federal financial aid by 2018, if Congress approved the plan. The federal government provides more than $150 billion in student financial aid each year, and typically that aid has been based on enrollment figures, not the value of the education.

The plan also challenges colleges and universities to develop new ways to cut costs and serve a wider population. And it proposes capping student loan payments at 10 percent of the borrower's monthly income to keep loans manageable and changing the way funds are disbursed to ensure they're used properly.

"We've got a crisis in terms of college affordability and college debt," Obama said.

A college degree has never been more important or more unaffordable, with the cost of tuition rising 257 percent in the past 30 years, while incomes rose only 16 percent during that time, Obama said. He called on states to step up their financial support, noting that students are graduating with an average of $26,000 in debt.

William E. "Brit" Kirwan, chancellor of the state's university system, said he considers Maryland's public institutions a model for the president's proposal. They have had the lowest tuition increase of any state since 2008, are well funded by the state, and have been in cost-cutting mode for the past seven-plus years, slashing administrative overhead while developing affordable options like hybrid classes held partially online, he said.

"All of this has been recognized in various forms by President Obama," said Kirwan, who was briefed on the president's proposal Wednesday evening, in advance of the announcement. He called it what "the nation needs at this time."

"We certainly hope that the administration will be open to constructive suggestions as the details evolve," Kirwan said.

His one concern focused on the idea of ranking schools based on the income level of graduates.

"I think we need philosophy majors and students in the arts, and many of these individuals get a great education even though their first job isn't a high-paying one," Kirwan said.

Overall, though, he saw Obama's plan as a much-needed shift toward helping lower-income populations.

"For too long, in my opinion, the [higher education] reward system has been wrong," Kirwan said. "It has these superficial rankings that provide greater recognition to places based on selectivity and the use of financial aid to buy high-ability students who are going to go to college anyway, and not enough focus on serving needy students and helping them along the path toward a college degree."

Some feared, however, that state institutions catering to underprivileged populations could be hurt by the proposal.

Maryland's historically black colleges and universities, for example, have the lowest graduation rates in the state, which would count against them in a rating system. But they also have a higher percentage of under-prepared urban students eligible for need-based aid.

It's unclear if one measure would mitigate the other, which makes Jarrett Carter, a spokesman for Morgan State University in Baltimore, uneasy.

"At the surface of this, these factors don't seem to easily bode well," Carter said.

Tina Bjarekull, president of the Maryland Independent College and University Association, echoed Carter's concerns. But, she added, there was much to praise in the proposal, including a plan to release loan funds to students throughout the year, as needs arise, rather than in a lump sum.

According to the National Center for Education Statistics, the total cost of higher education — including tuition, room and board — for undergraduates at four-year public institutions ballooned 73 percent between 2001 and 2011, when the average cost was $15,900 per year.

Americans now owe about $1.2 trillion in student loan debt, the Consumer Financial Protection Bureau estimates. Obama said that debt was crippling to the U.S. economy.

If costs put college out of reach for too many young people, the United States could find itself at a disadvantage compared to other countries.

Obama signed legislation this month that reversed a big increase in student loan interest rates and will tie future rates to fluctuations in the 10-year Treasury note. The bill was hammered out in intensive negotiations with lawmakers.

Over the past five years, the president has rolled out a number of college affordability initiatives, including increasing Pell Grant aid to low-income students, encouraging colleges to be more transparent about costs, and awarding grants to states and institutions that work to bring costs down.

The details of his latest proposal will be hammered out over the coming months with wide input, Obama said.

Hopkins spokesman O'Shea urged the administration to avoid a "one-size-fits-all" program.

"It's important to keep in mind that higher education in America is incredibly diverse," O'Shea said. "There are many different types of colleges and universities. We have different missions, we serve different students and there are differences in the outcomes we seek. A one-size-fits-all system of institutional accountability would not serve students well. At the same time, it won't be easy to build a comprehensive system that takes all our differences into account."

Reuters contributed to this article.

tricia.bishop@baltsun.com

twitter.com/triciabishop

Copyright © 2014, The Baltimore Sun
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