Just a few days after alluding to critical higher education cost and investment issues in his annual ‘State of the Union’ address to Congress, President Barack Obama has now provided greater detail on his vision for “keeping college affordable and within reach for all Americans”. Specifically, the president has put forth a policy agenda that seeks to incentivise states to make systemic changes that would “reduce costs for students and promote success in our higher education system at public colleges”. At the same time, colleges and universities would be individually rewarded with greater access to federal financial aid if they can demonstrate strong performance in the following areas: 

• setting responsible tuition policy, i.e. “offering relatively lower net tuition prices and/or restraining tuition growth”; 
• providing good value to students, by providing “quality education and training that prepares graduates to obtain employment and repay their loans”; and 
• better serving low-income students, through relatively higher levels of enrolment and graduation of “Pell-eligible” students (see ACA Newsletter – Education Europe, December 2011).

To push this agenda forward, the Obama administration would like to launch several new initiatives, amongst them: 

• “The Race to the Top: College Affordability and Completion” programme. This effort would be funded at a level of USD 1 billion (EUR 756 million) and be used to encourage state-level reforms, for example to revamp the structure of state funding for higher education, and facilitate on-time completion by students of degree programmes. 
• “The First in the World" competition. This programme would see an investment of USD 55 million (EUR 41.6 million), and would be allocated to individual colleges and universities, as well as non-profit organisations, “to develop, validate, or scale up innovative and effective strategies for boosting productivity and enhancing quality on campuses".

Many details are missing from the broad outline of what President Obama has proposed this month, and little can proceed without Congressional action. For the most part, the US higher education community has generally welcomed the president’s attention to the challenges it faces. The National Association of Independent Colleges and Universities, however, speaks for many stakeholders when it asserts that collaboration in a climate of “mutual trust” is key, that answers will “not… come from more federal controls on colleges or states” and that “unintended consequences” of well-intentioned reforms should be carefully avoided.

The White House

National Association of Independent Colleges and Universities