Vice President Joe Biden announced college affordability as an administration priority during a Middle Class Task Force speech in St. Louis today.
The cost of college tuition has risen much more than household income, according to the Task Force. Since 1979, average household income went up 10 percent, compared to 154 percent for private and 186 percent for public tutition.
"The challenges of paying for college in America is well understood - the growth of college tuition is far outpacing that of family income" said Vice President Biden. "This is something we are genuinely, genuinely committed to changing," he added, according to the Washington Post.
"This is the largest investment in education since the G.I. Bill," said Education Secretary Arne Duncan who was also at the forum.
Biden talked about multiple strategies by the federal government to make college more affordable:
- Invest close to $225 billion in scholarships and tax credits for students over the next decade.
- Replace current tax breaks for students with a more generous, all-inclusive American Opportunity Tax Credit. This credit can be claimed for four years of college and raises the maximum to $2,500 per year. It can also be claimed against fees and textbook expenses.
- Adding more money per student on Pell Grants. The grant will increase by $500 in the 2009-2010 academic year and the maximum value will rise to $5,350. It will continue to grow each year based on the Consumer Price Index.
- Expand and simplify direct loans, making the application process easier for students. The complexity of FAFSA was a major deterrent against students using federal loans, according to Biden's report.
- Direct federal administration of the loans instead of farming it out to banks. This could be controversial, but the administration says it could save $94 billion over the next decade.
In addition, the task force called on colleges and universities to do more to eliminate wasteful spending and operate more efficiently.
Sen. Claire McCaskill (D-Mo.), Gov. Jay Nixon (D-Mo.) and Cecilia Rouse, a member of the Council of Economic Advisers also joined the Vice President at the forum at the University of Missouri at St. Louis.