Obama’s Campaign for College Plan Eyeing Fiscal Debate

President Barack Obama is still on the campaign trail even though he won’t face another election.

For the fourth time in a month, Obama is on the road promoting proposals he says are needed to assure U.S. economic growth and to lift middle- and lower-income Americans battered by the worst recession since the 1930s.

While Obama’s topic yesterday and today has been the cost of higher education, politics and the coming budget battles with congressional Republicans remained in the foreground.

“Rather than keeping focus on a growing economy that creates good middle-class jobs, we’ve seen a faction of Republicans in Congress suggest that maybe America shouldn’t pay its bills that have already been run up, that we shut down government if they can’t shut down” the 2010 health-care law he pushed through Congress, Obama told a cheering crowd at the University of Buffalo in upstate New York yesterday before outlining his plan to rein in college costs.

The president is seizing the stage before lawmakers return to Washington on Sept. 9 from a five-week recess and renew talks on three financial fronts -- a stopgap measure to fund the government in the first few months of the fiscal year starting Oct. 1, raising the government’s $16.7 trillion debt limit and replacing about $1 trillion in across-the-board spending cuts, known as sequestration.

“There will be some resistance,” Obama said today at Binghamton University in New York. “But part of our goal here is to stir a conversation.”

2014 Elections

Curbing the costs of college is one element of Obama’s “bargain for the middle class,” which also includes spending on infrastructure, programs to bolster job growth and aiding the housing market. All are geared toward generating public support to strengthen his hand in the dealing with Republicans and helping Democrats in next year’s congressional elections.

“Everything’s a setup for 2014,” said Jonathan Krasno, professor of political science at Binghamton University. “The Democrats can’t afford another shellacking like in 2010,” when Republicans seized control of the House and gained Senate seats.

Obama yesterday told his audience in Buffalo and later in Syracuse that the country can’t afford “the usual circus of distractions and political posturing” in Washington.

The subject of college cost plays directly to one of Obama’s core constituencies. In his 2012 re-election, he won 60 percent of the vote of those ages 18 to 24.

Government Rankings

At the University of Buffalo yesterday, Obama said he’s directed the Education Department to create a new government ranking of colleges that would factor in cost, student debt and graduation rates, among other criteria. He proposed Congress pass legislation that would tie federal financial assistance to those ratings.

The White House said the new ratings would be based on such measures as access, including the percentage of students receiving Pell grants, reserved for those from lower-income families; affordability, including average tuition, scholarships and loan debt; and outcomes, such as graduation and transfer rates, earnings of graduates and graduates’ advanced degrees.

The federal government provides more than $150 billion a year in federal student aid, awarding it based on the number of students who enroll, rather than the number who earn degrees or what they learn, the White House said.

The federal government already gathers reams of information to develop the ranking, and the administration has produced a College Scorecard with data on cost and student debt.

Cost Burden

“The soaring cost of higher education” has “become a barrier and a burden for too many American families,” Obama said to a cheering crowd of 7,200 at Alumni Arena on the campus of the University at Buffalo.

The message was “dear to my heart,” said Richard Kalb, who was dining at Magnolia’s Deli & Café in Rochester, New York, when Obama stopped there after his speech. His daughter Natalie, a senior, returns today to the College at Brockport, part of the State University of New York system.

“I stay up at night worried about student loans and how I can pay for them,” said Kalb, 49, a designer at Xerox Corp. in Rochester.

Among lawmakers, reaction to Obama’s proposal suggested the political difficulty of getting legislation through Congress to tie aid to rankings.

Iowa Democrat Tom Harkin, who heads the U.S. Senate education committee, said he supported college ratings “to help students and their families make informed decisions.” Still, he didn’t say whether he would back tying aid to such rankings.

Unintended Consequences

Minnesota Republican John Kline, chairman of the U.S. House Education & the Workforce Committee, voiced concern “that imposing an arbitrary college-ranking system could curtail the very innovation we hope to encourage -- and even lead to federal price controls.”

Some education leaders criticized Obama’s plan, saying its unintended consequences might include discouraging colleges from accepting and giving aid to students from low-income families because of the risk that they might hurt the school’s rankings.

“It’s a very hard job to decide on how to rate colleges,” Derek Bok, former president of Harvard University in Cambridge, Massachusetts, said in a telephone interview. “I have to be somewhat apprehensive when any force as powerful as the federal government undertakes the task.”

After his stops at Binghamton, and yesterday in Buffalo and a high school in Syracuse, the president was scheduled to speak at Lackawanna College in Scranton, Pennsylvania later today.

Before it's here, it's on the Bloomberg Terminal.