New Plan to Cut College Costs? Been There, Done That

The hearts and pocketbooks of American parents sang with joy when President Obama announced a plan to make college more affordable. Applying to college can be a challenging experience, but figuring out how to pay for it is even more difficult, especially when college tuition increases at twice the rate of inflation.

Unfortunately, after the announcement was made and the confetti was cleaned up, parents and educators were surprised to discover the foundation of this plan included three approaches to cost savings that are circular, confusing, and eerily familiar.

Same Money, Different Program

Under the new plan, colleges that limit tuition hikes can receive more federal funding if they work with more low-income students, clearly a win-win. But since this program won't be created with new tax dollars, funding for this program will come from three existing programs already designed to help low-income students pay for college. In other words, colleges can get the same money now, as long as they enroll more low-income students. If that's the case, what's the incentive for limiting tuition hikes?

States Must Pay Their Fair Share -- Except They Can't

With the creation of a Race to the Top program for universities, additional federal funding would be available to public colleges, provided states agree to maintain their current levels of financial support to these colleges. This would be a great idea, except many states don't have the money, which is why colleges are raising tuition in the first place. Many states can't run deficit budgets the way the federal government can, so cuts in services are inevitable -- and when the choice comes down to cutting funding to colleges, K-12 schools, or public safety officers, colleges will always lose.

Didn't We Just Do This?

The same Race to the Top program requires colleges to make other adjustments, including an increase in graduation rates and a review of the college's goals and outcomes.

These required adjustments have two problems: Colleges and universities will have to make these changes before they can be considered for the funding, and there's no guarantee a college that makes these changes will receive any federal support. If colleges can't count on federal help, they'll end up spending more of their own money to fund new programs to improve graduation rates, which will inevitably lead to -- you guessed it -- tuition increases to pay for the new programs.

This situation has more truth to it than fiction, since many states are still hurting from a federal government bait and switch with a K-12 Race to the Top program. After making changes in K-12 teacher accountability and goals and outcomes -- new programs that cost new money -- states applied for Race to the Top funding, only to be told their reforms were not extreme enough to merit federal support. The states had to shoulder the cost of these new programs, all in economic times where money was in short supply. Michigan was one of those states -- the same state where President Obama announced the college version of Race to the Top. The federal government got the changes they were looking for without spending a dime -- at least, not their dime.

College costs certainly are out of control, and the federal government can play a key role in reducing further tuition hikes. At the same time, shifting funds from one program to another is hardly innovative, and asking colleges and states to take on more of the cost of reforms will lead to bigger tuition increases, not smaller ones. Something must be done, but experienced educators will tell you this "new" plan isn't the way to go.