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Obama outlines plan to cut college costs. Could it backfire on students? (+video)

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In principle, some of the proposals make good sense while others may have unintended consequences, says Sandy Baum, a higher education analyst and senior fellow at George Washington University School of Education.

“It’s a good idea for the federal government to provide incentives for states and public institutions in particular to find innovative ways to provide quality education at lower costs,” Ms. Baum says of the Race to the Top proposal.

She also agrees that the current formula for distributing campus-based financial aid is out of date and needs to be revised.

But “taking [aid] money away from the students who are going to college in states that are raising their tuition just doesn’t seem very constructive,” Baum says. The federal incentive probably wouldn’t be enough to offset state budget problems that led to tuition increases in the first place, and some students wouldn’t enroll in college at all if less aid were available to them at their local public institution, she notes.

Here are more details of Obama’s proposals, according to a White House fact sheet:

Restructuring aid distribution:

Colleges that restrain net tuition, prepare students well for employment, and serve higher numbers of financially needy students would be poised to receive more aid. The shifted aid would come from three sources: Supplemental Educational Opportunity Grants, Perkins Loans, and Work Study. There would be no additional cost to taxpayers, the White House says.

Race to the Top:

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