“In America, no one should go broke because they chose to go to college,” President Barack Obama said during his State of the Union address. “The best anti-poverty program around is a world-class education.”
From loan policy to student health care policies, Obama has proposed multiple reforms for education during his first year in office. In his State of the Union address Wednesday, he touched on plans that would affect the budget of the University of Minnesota and its students.
Whether lawmakers will support and enact his proposals remains to be seen, as the Student Aid and Fiscal Responsibility Act has stalled in the Senate due to continued debate on health care reform.
Obama’s proposals include a 6 percent increase in federal education funding for the 2011 budget, a $10,000 tax credit for some families with children in college and a system that would forgive some loans after 20 years of debt.
Student aid reform
In September, the House passed the Student Aid and Fiscal Responsibility Act, but the bill has stalled in the Senate.
The act would shield most education programs from Obama’s proposed freeze on government spending.
It would give a $10,000 tax credit to families paying for four years of college, increase Pell Grants and reform the student loan system.
Under the act, loans given through the direct loan system would be forgiven after 20 years, or 10 if the student goes into a career of public service.
Additionally, students would only be required to make a maximum payment of 10 percent of their discretionary income, instead of the current 15 percent.
Discretionary income is defined as any income 150 percent above the poverty line, said Tricia Grimes, a policy analyst for the Minnesota Office of Higher Education. For a single person with no children, the poverty level is a salary of less than $16,245.
Grimes said that while loan forgiveness could encourage students to borrow more money or go to expensive colleges, there are maximums on federal loans, so students would have to move on to private or state loans, which aren’t covered under the loan forgiveness piece of the act.
“I’m not sure the act would really help enough to affect students’ choices for college,” she said.
Under the plan, colleges currently using a bank loaning system would move to a direct loan system, which the University already uses. In a direct loan system, the government loans money directly to students instead of through third-party agencies.
During the 2007-08 school year, 68 percent of seniors graduating from public universities in Minnesota took out loans. Of that, they borrowed an average of $22,907, according to the Minnesota Office of Higher Education.
Research and stimulus money
The University has received more than $72 million in stimulus money for research, much of which came in the form of individual or small groups of professors receiving grants for research projects.
Most of the money was funded by the American Recovery and Reinvestment Act — the stimulus bill — which, during the State of the Union address, Obama deemed the “biggest investment in research in history.”
The stimulus bill provided $89.3 million for the University outside of research, $50.1 million of which went toward buying down tuition, according to University Services.
Money from the stimulus bill is a one-time gift, however, and the University still increased tuition this year by 7.5 percent and is dealing with budget cuts that have resulted in layoffs and a hiring freeze.
National health care reform has been a key issue of Obama’s administration, and he said during the State of the Union that he has not given up on it.
In its current form, the bill would create a national provision allowing adults to stay covered under their parents’ health insurance plans until the age of 26.
The American Council on Education has raised concerns that the current bill being debated would make health insurance plans offered to students by colleges and universities more expensive.
Under the proposed reforms, college health insurance plans would be “rated and priced with all policies being sold in the individual market,” according to the ACE, and proposed changes would increase premiums for programs that cover as much as many college health insurance programs do.
“This is counterproductive to the significant actions Congress and the administration have taken to make both higher education and health care more affordable,” said Molly Corbett Broad, president of the ACE, in a letter to Congress.
Broad said that while the proposed reform would change the way premiums are set, the language in the bill is rather vague on the topic of college health insurance plans.
“It’s really ambiguous as to what affect it would have on them,” she said. “We simply don’t know if plans that colleges offer would be required to adhere to those regulations.”
Math and science education
During his address, Obama reiterated his view that an emphasis on math and science in K-12 education is essential to stay competitive with countries like China.
“Our future is on the line,” Obama said in a speech in January. “The nation that out-educates us today is going to out-compete us tomorrow.”
“I don’t think math and science instruction has been lacking before, but I think we’re progressing,” said Tamara Moore, professor in the College of Education and Human Development’s department of curriculum and instruction. “CEHD is spending more time focusing in on how you can integrate these subjects together in ways that can allow students to understand each subject better.”
With five other colleges, CEHD is opening the Science, Technology, Engineering, and Mathematics (STEM) Education Center on Feb. 11, which will research the way students learn these subjects and how teachers can better incorporate and teach them.
“Oftentimes, math and science has only been taught at a procedural level, not a conceptual level,” said Grimes, who is also co-director of the STEM center. “But understanding STEM allows people to better make decisions and helps us be more well-rounded.”