President Obama declares war on college costs

US President Barack Obama addresses a campaign event at the University of Illinois at Chicago in Chicago, Illinois, on Jan. 11, 2012.
Getty Images/Jewel Samad

COMMENTARY President Barack Obama is turning up the heat on colleges and universities.

The president wants these institutions to get serious about making college affordable. Of course, politicians and presidents have been lamenting for years that college tuition continues to outstrip the rate of inflation rate and nothing has happened.

Here, however, is what's heartening this time around: Mr. Obama appears to have the guts to do something besides grumble about runaway college costs. The president, after all, has a track record. His administration has already gone after the private student loan industry and for-profit universities and achieved meaningful changes. The administration has also been pushing aggressively for much-needed reform in the nation's K-12 systems through its Race for the Top competition among states.

Getting the hidebound higher-ed industry to change will take more than just a pretty please. It will require money. Or rather the threat of withholding money. And, in that regard, the federal government is in a position of power. The feds pump billions of dollars into private and public colleges and universities through grants, loans and tax credits. Last year, the government's tab was $167 billion.

Carrot and stick

The administration is proposing that some federal aid would be contingent on schools keeping their prices reasonable and providing good value. Schools that enrolled more low-income students, generated higher graduation rates and documented good job placement rates would be rewarded with more federal aid for student loans and other programs. The slackers would come up short.

What's impressive about Mr. Obama's effort is that he is not just interested in lowering costs. He is demanding more affordable prices and better outcomes.

"We should push colleges to do better," Obama said in a speech at the University of Michigan. "We hold them accountable if they don't."

College naysayers

Predictably, college administrators and their industry groups are doing their "sky is falling" routine. These are the same characters, who congratulate themselves if they limit yearly tuition increases to only 4% or 5%.

If Obama thought the student loan and for-profit university industries were tough adversaries, he hasn't seen anything yet.

All I can say is, good luck.