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Obama, on bus tour, to unveil new strategy to curb college costs

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Moreover, the struggling economy has only made things worse, as states cut higher-ed spending to balance their budgets, and public universities make up the cuts by raising tuition.

Just what Obama can do to shake up that system is unclear, even if he is able to get Congress to cooperate with him. A major rethinking of the current system – how it’s funded, how we conceive of higher education and who pays for it, and how such education is delivered – is likely needed, but such game-changing solutions are politically difficult.

The Obama plan aims to set up a rating system by 2015 and to start using that system to distribute student aid by 2018.  For students, opting for a highly rated college means access to larger grants and more affordable loans. The aim of the plan is to give institutions an incentive to cut costs and ensure better outcomes for disadvantaged students. But such a plan would be controversial and require complex legislation in a typically gridlocked Congress.

“Part of the reason the federal government hasn’t been able to do anything is less a technical issue than a political one,” says Amy Latinen, deputy director for higher education at the New America Foundation. “The federal government can do a lot. Obama on his own can’t do much.”

While student loans and interest rates often get the most attention – such as the heated debate earlier this summer over the rate on certain subsidized federal student loans – most higher-education observers agree that the more significant issue for family budgets is the skyrocketing cost of college.

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