Making College More Affordable In Florida
Tomorrow at Lake Area Technical College in South Dakota, the President will underscore the importance of making community college available to all responsible students as part of his America's College Promise Campaign, one of several major proposals that build on the historic investments the President has made in college affordability and quality.
Nearly a century ago, a movement that made high school widely available helped lead to rapid growth in the education and skills training of Americans, driving decades of economic growth and prosperity. America thrived in the 20th century in large part because we had the most educated workforce in the world. A quality higher education continues to be the single most important investment students can make in their own futures and that we can make in the future of our nation. But other nations have matched or exceeded the United States’ investment in higher education. Today, more than ever, Americans need more knowledge and skills to meet the demands of a growing global economy without having to take on decades of debt before they even embark on their career.
Since taking office, the President has made historic investments in college affordability and quality. Over the past six years, the President and Congress have:
· Increased Pell Grant funding, the government’s primary scholarship program, in Florida by approximately 90% since 2008, from around $1 billion in aid in 2008-09 to $2 billion in 2015-16. Across the country, Pell funding has increased by 70 percent, and the maximum award has increased by $1,000 to a maximum of $5,775 since 2008. As of 2015-16. Pell Grants will have helped more than 2 million additional students per year.
· Created the American Opportunity Tax Credit (AOTC), providing up to $2,500 per student, per year to help cover the cost of tuition, fees and books. Under the AOTC, students and families in Florida will receive $1.2 billion in tuition credits in 2016, an average benefit of $1,570 for every family claiming the credit. Nationwide, families benefitting from the creation of the AOTC will receive an additional $1,000 on average per year compared to the tax credits available prior to its enactment. Combined, the AOTC and the Lifetime Learning Credit will provide families with more than $20 billion of assistance in 2016, an increase of about 170 percent value relative to the value of education tax credits in 2008.
In part as a result of these investments, and despite deep cuts to higher education in many states, the net price students pay – tuition after scholarships and tuition-based tax credits – has actually fallen at four-year private colleges and remained constant at community colleges. At community colleges, the average full-time student could save $3,800 per year under the President’s America’s College Promise Proposal, which would make two years of community college free for responsible students.
Many states responded to the recession and resulting budget shortfalls by cutting funding for higher education. As a result, public four-year colleges faced significant cuts to their state funding. The President’s investments in higher education, including Pell Grant funding and AOTC benefits, have helped fill the gap so that students can still afford the rising costs at public four-year universities.
This year, President Obama proposed to build on this progress with a bold plan to make community college free for responsible students, ensure that the Pell grant is never eroded by inflation, and simplify, expand and make permanent the American Opportunity Tax Credit. He is also working to make student loans more affordable – including expanding current regulations that cap student loan payments at 10 percent of income – and encouraging innovation and competition to bring down the cost of college.
Republican Budget Agreement Turns Back the Clock
Despite these hard-fought gains in college affordability, Republicans in Congress have proposed a budget that slashes these and other investments that benefit students and their families. The budget blueprint agreed to by House and Senate Republicans last week would eliminate $90 billion in dedicated Pell Grant funding and let the American Opportunity Tax Credit expire after 2017 – resulting in a tax increase on millions of students and families.
In Florida Republican cuts to Pell funding would put financial aid in jeopardy for approximately 562 thousand students who rely on Pell grants to help afford college.
Meanwhile, the approximately 779 thousand students and families in Florida receiving an average AOTC of $1,570 would pay higher taxes under the Republican budget, which fails to extend the American Opportunity Tax Credit after 2017. By ending this tax credit, the Republican budget would increase the net cost of tuition and some 10 million students and families across the country would face an average tax increase of more than $1,000.
Continuing a Record of Success
The Administration’s success in making college more affordable through Pell Grants and the American Opportunity Tax Credit are part of a broader agenda to open the doors to a quality college education. Since taking office, the President has taken steps to expand federal support to help more students afford college, to make student loan debt manageable by capping payments as a percentage of income, to help students understand their college choices, to hold schools accountable for student outcomes, and to test new approaches to help disadvantaged students succeed in college, all while calling for a shared responsibility among states and higher education institutions in tackling rising college costs. Key achievements and proposals to build on these steps include:
· America’s College Promise: The President’s Budget calls for making two years of community college free for responsible students, letting students earn the first half of a bachelor’s degree and earn skills needed in the workforce at no cost. This proposal will require everyone to do their part: 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. The program would be undertaken in partnership with states and is inspired by new programs in Tennessee and Chicago. If all states participate, an estimated 9 million students could benefit. A full-time community college student could save an average of $3,800 in tuition per year.
· Keeping Interest Rates Low: In 2013, the President and Congress enacted a bipartisan plan that allows millions of borrowers to continue to benefit from low interest rates in the marketplace, guarantees that borrowers can lock in these rates over the life of their loans, and protects future borrowers by capping interest rates, which saves the typical undergraduate student $1,500 over the life of the loans.
· Making Student Debt Manageable: The President has created and expanded student loan repayment options that help borrowers manage their student debt responsibly and ensure their payments are manageable. Because of these efforts, all new borrowers can now cap their loan payments at 10 percent of their incomes so that repayment is affordable and they can responsibly meet their obligations. As directed under a Presidential Memorandum issued last June, the Department of Education has also started the process to expand its regulations to as many as 5 million more borrowers by allowing all Direct Loan student borrowers to cap their payments at 10 percent of their incomes, with new regulations expected in December 2015.
· Help Students Succeed in College: For a college education to fulfill its promise, students need to persist and complete their degrees and programs. Too many students - particularly low income students - struggle to succeed in college. That is why the Administration created the First in the World Program, which provides grants to colleges and universities to test new approaches to improve outcomes for disadvantaged students. The goal of the program is not only to improve student outcomes today, but also to build a stronger evidence base of what works so that all colleges and universities can better shape their programs. The first $75 million in grants were awarded in 2014 to 24 colleges and universities. This year, the President proposed increasing the First in the World program’s funding to $200 million. This and other key investments are possible only because the President’s Budget reverses the harmful effects of sequestration, providing resources for the investments we need to strengthen the economy and expand opportunity.
· Measuring College Quality: The Department of Education continues to develop new metrics for measuring student outcomes at colleges and universities. These metrics will help students and families make informed college decisions and move toward a system where institutions of higher education are held accountable for delivering the high quality education that our students deserve and our economy demands. The Department plans to publish the new college ratings by the 2015-2016 school year, recognizing institutions that excel at enrolling students from all backgrounds, focus on maintaining affordability, and succeed at helping all students graduate with a degree or certificate of value.
· Partnering with the Private Sector on a Call to Action on College Opportunity: Last December, the President, Vice President, and First Lady joined college presidents and leaders of non-profits, foundations, and other organizations to announce over 600 new commitments to produce more college graduates. Community colleges made commitments individually, and in partnership with neighboring school districts and four-year institutions, to build seamless transitions among institutions, develop clear educational and career pathways, implement strategies to increase student completion of STEM programs, and establish more accurate measures of student progress and success.
· Making Job Training More Demand Driven: Training America’s workers with the skills they need for a good job can help middle class families obtain better employment and help American businesses grow our economy. Through the Trade Adjustment Assistance Community College and Career Training program more than 1,000 institutions have received nearly $2 billion in federal funding to design education and training programs Working closely with employers and industry, the grants allow community colleges and other eligible institutions of higher education to improve their ability to deliver education and career training programs that will help job seekers get the skills they need for in-demand jobs in industries like information technology, health care, and energy. Alongside efforts to make our training system more demand-driven through implementation of the Workforce Innovation and Opportunity Act, the President has proposed a new American Tech Training Fund to support the expansion of innovative, evidence-based job training programs as well as new investments in apprenticeships and industry-recognized credentials.
Through the numerous and historic investments that he has made in higher education since taking office, the President has expanded federal support to help more students and families afford college and enter the workforce with the skills and knowledge to succeed.
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