Biden, in a swing state, addresses student anxiety over college costs (+video)
While Biden and other federal officials can use the bully pulpit to push for solutions to the cost problem, “the biggest problem right now is state budgets and increasing tuition at public universities as a result, and the federal government has very limited influence over that,” says Sandy Baum, a senior fellow at George Washington University School of Education.
Ultimately, the biggest help, she says, would be an improved economy so that families have jobs and so that revenues start flowing again into state coffers.
But she and others give the Obama administration credit for steps it has taken. Among them, according to the US Department of Education:
Reforming student loans. By making all federal loans directly and eliminating subsidies for banks that had been acting as middlemen, the US government will save $60 billion over 10 years, the Obama administration estimates. Its plan is to invest most of that into federal Pell Grants.
Boosting Pell Grants. The maximum grant now for low- to middle-income students is $5,500 a year, up from $4,731 in 2008.
Tax credits. Through the American Opportunity Tax Credit, 9.4 million families in 2011 received as much as $2,500 for tuition, fees, and textbook expenses.
Loan repayment improvements. Graduates who are eligible can cap their monthly repayment bills at 10 to 15 percent of their discretionary income and have the remainder of their loans forgiven after 20 years of payments. Public service workers can have loans forgiven after 10 years.
President Obama, Biden, and Secretary of Education Arne Duncan have also been meeting with college presidents, financial aid professionals, and even college athletics leaders to urge them to do more to cut costs.
