Officials at Clemson, Furman and the University of South Carolina said they welcome exploring possible changes to the formula for federal funding of higher education, although not enough detail about the proposal outlined by President Obama on Thursday has emerged for them to know if they would support it.
Speaking at a state university in Buffalo, N.Y., Obama put forward a plan that would link federal funding for higher education to affordability and provide more flexibility in how loans are paid back, USA TODAY reported.
“We can’t price the middle class – and people working to get into the middle class – out of a college education,” he said.
If the proposal takes into account what students actually pay rather than the sticker price and grades universities on their actual performance instead of improvement, Clemson University should fare well, a university official said.
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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, according to USA TODAY.
The proposal would need congressional approval to go into effect.
Chuck Knepfle, director of financial aid at Clemson, said the school should do well on a report card such as Obama proposed if it looks at such things as the student loan default rate of alumni. Clemson’s rate is 1.4 percent, compared with a national rate of 9.1 percent, he said.
“If you look at any current measure of performance at Clemson – graduation rates, persistence rates, student debt loads, student default rates – we’re excellent, and we’ve been doing a good job for years,” he said.
But if it measures improvement in those areas it could be tough for schools that already have good numbers, he said.
“If all of a sudden our Pell grant funding is in jeopardy because we didn’t increase retention rates from 91 percent to 92 percent but a school that goes from 50 percent to 55 percent does, I think there are a lot of us who would find that to be unfair,” Knepfle said.
Plan also focuses on debt
In addition to pressuring colleges over costs via a new ratings system, Obama said his plan has two other goals: encouraging schools to innovate and compete for students, and helping students manage their loan debts, according to USA TODAY.
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.
The plan also calls for expansion of a “Pay As You Earn” program that would cap loan repayments at 10 percent of income, after basic necessities are paid for.
And it says that colleges should offer a greater range of “affordable, high-quality options” that will generate competition with other colleges and drive down prices.
Shinead James, a Clemson philosophy major from Horry County who said she will owe more than $40,000 in student loans when she graduates in December, said the proposal to base loan payments on earnings sounds good to her.
“I think it should be based on how much you make because what if you get out of college and you don’t have a well-paying job and you have all these student loans?” she said. “There has to be a happy medium somewhere or you’re going to be in debt for the rest of your life.”
Tuition at Clemson has nearly doubled in the past decade, going from $7,840 in 2004-05 to $13,054 this year for students from South Carolina, according to the state Commission on Higher Education.
During the same time, it jumped from $6,416 to $10,816 at the University of South Carolina.
But Knepfle said most in-state students have lottery-funded scholarships that cover most of that.
“So the schools in South Carolina, if you look at our tuition structure, we look like we’re high,” he said. “But in reality, this year’s freshman class is paying 35 percent of our stated tuition.”
Out-of-state students such as Michael Veale, a junior education major from Charlottesville, Va., who are bearing a much higher burden, stand to benefit from any proposal that makes college more affordable.
“It’s definitely going to help for me being from out of state, I think, to sort of lower the costs, and I guess this will make it easier to pay off the loans,” he said.
Debt a drag on investment
Cody Rega, a sophomore from Columbia majoring in chemistry, said high student loan debt is keeping graduates from being able to invest in their futures once they enter the workforce.
“Instead of being able to pay mortgages, they’re paying on student loans,” he said. “I think that’s unfortunate.”
The average tuition cost at a four-year public college has increased by more than 250 percent over the past three decades, according to the White House. Meanwhile, incomes for typical families grew by 16 percent, USA TODAY reported.
Students in the USC system rely on $318 million in federal financial aid each year, said Wes Hickman, interim vice president for communications.
“Drastic cuts in state funding, along with mandated and rising costs for utilities, insurance, health care, equipment, facilities and infrastructure, have forced students and their families to bear a greater share of the cost of education,” he said.
“This model is no longer sustainable.”
He said USC is improving access and affordability through programs such as Palmetto College, a program that allows rural, working or place-bound students to complete a bachelor’s degree online without leaving their jobs, families or communities.
The institution also offers a year-round academic calendar that allows students to accelerate their graduation, or complete an internship or co-op experience to boost their job prospects, he said.
“We welcome a conversation about accountability and transparency,” Hickman said. “With USC’s record retention and graduation rates, enrollments and SAT scores, we are confident we’ll exceed any measure placed before us.”
At Furman University, federal loans and grants account for 18 percent of the financial aid budget of $69.9 million, or $12.6 million, said spokesman Vince Moore. The rest comes from Furman’s institutional funds, state, private and tuition benefit sources, he said.
“Since President Obama’s plan is still in the early stages of its development, it’s difficult to speculate how it would ultimately affect America’s colleges and universities,” said Furman interim president Carl Kohrt.
“But any effort to make college more accessible for students and their parents is something worth pursuing.
“Furman works diligently to help its students with the cost of attending the university, and we are always open to new ideas in that area.”
Resistance in Congress
Obama’s proposal will meet some resistance in Congress, at least from 4th District U.S. Rep. Trey Gowdy.
“The president should focus his attention on Egypt, Syria, creating jobs for those who do come out of school, finding answers to what happened in Benghazi and restoring the little bit of trust left in the institutions of government, and let the same market forces that serve us well in every other facet of life serve us well in higher education,” the Republican from Spartanburg said.
“The last thing South Carolina colleges and universities need is another governmental behemoth rating them. And South Carolina parents and students are fully capable of deciding value for themselves.”
A spokesman for U.S. Sen. Tim Scott said the senator would keep an open mind on the subject.
“We continue to review the president’s proposal released today regarding college affordability,” Sean Smith said.
“Sen. Scott’s life was transformed by the power of education, and he fully understands the importance of increasing access to post-secondary education for all students.
“As a member of the Senate Education Committee, the senator looks forward to multiple hearings and action on post-secondary education this fall and hearing from college administrators, students, parents and other relevant parties on what will hopefully be a bipartisan, common sense path forward.”