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Obama education plan at war with itself: Our view

09/09/2013

USA TODAY.  September 8, 2013.  For decades, universities were in the money. They expanded their administrative staffs, splurged on new buildings, tolerated money-losing sports and indulged professors too busy with their research to be bothered with teaching.

This produced bloated institutions that, while still outstanding in many ways, are dreadfully inefficient and keep raising tuition despite (or perhaps because of) the billions of dollars in federal and state money flowing in each year.

But now the good times appear to be ending, which stands to be good news for anyone in search of high-quality education at a lower cost.

Governments are growing decidedly less generous. And technology is beginning to disrupt education as it has other industries. "Massive open online courses," or MOOCs as they are called, could displace significant numbers of teaching jobs.

Just as students and parents struggle to pay for the fall semester, into this mix steps President Obama, offering his latest proposal to deal with the sky-high cost of higher education. Obama's plan is an internally contradictory mix of good and bad.

OPPOSING VIEW: Give relief to those who earn less

Starting with the positive: The president proposes that Washington steer more of its money to colleges that rank highly in a new rating system that looks at such factors as graduation rates and the average incomes and debt loads of graduates.

This is a sensible idea that would pressure universities to hold down costs and look for efficiencies. If government is going to throw $150 billion a year at higher education, it has an obligation to taxpayers and students to demand accountability.

Elsewhere, however, the plan goes in the opposite direction, most notably in its call for expanding a program that allows students to repay their loans based on how much money they make, not what they owe.

Under this program, a graduate would pay 10% of his or her income regardless of the amount borrowed. If the payment is not enough to cover interest, the government would make up the difference. If the payment rises dramatically because of higher than anticipated income, the graduate could shift back into a traditional repayment plan.

Then, after 20 years (10 years for people in certain public service jobs), any remaining balance would be forgiven.

This idea might sound appealing, as it would benefit students who want to take low-paying jobs that serve their communities, or have to take low-paying jobs thanks to the slow economy.

But it comes with a price that would undermine the efforts of Obama and others to pressure colleges to become more efficient.

The cost of higher education is already something of an abstraction to students. If they knew they might not have to repay all that they borrow, they would have even less incentive to be smart consumers when shopping for a college. Colleges, in turn, would have less incentive to control their costs and to pass on the savings in the form of lower tuition.

That leaves the Obama plan at war with itself. It would pressure colleges to hold down costs while encouraging students to be less concerned with those costs. And it would use the income of graduates as an important measure of success for colleges, while providing incentives for graduates to take jobs that pay less.

Ultimately, the best thing that could happen for students and taxpayers is not someconvoluted, government-directed student aid plan. Rather, it is a smashing of the bubble that has sheltered higher education from much-needed change.

USA TODAY's editorial opinions are decided by its Editorial Board, separate from the news staff. Most editorials are coupled with an opposing view — a unique USA TODAY feature.