2 Youngest US Senators to Introduce Legislation to Lower College Costs

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by Dave Collins, Associated Press

HARTFORD Conn.—The two youngest members of the U.S. Senate are co-sponsoring a bill aimed at lowering college costs that includes withholding federal funds from schools that don’t meet affordability and quality standards.

Democratic Sens. Chris Murphy of Connecticut and Brian Schatz of Hawaii are planning to introduce the legislation this week. The two are still paying off their college loans.

Murphy says higher education is out of reach for many Americans because of skyrocketing tuition. He says too many students are leaving college with heavy debt.

The legislation would fund a competitive program to encourage schools to lower costs and reduce the time needed to get a degree. The bill also calls for schools to lose federal funding if they don’t meet the affordability and quality standards developed under the legislation.

Murphy, 40, and Schatz, 41, say skyrocketing tuition has put higher education out of reach for many Americans, with college costs having tripled over the past 30 years. And they say too many people are leaving college with high loan debt.

“College administrators need to wake up every morning thinking about how they can make school cheaper, and that is not happening today,” Murphy says.

The average cost of tuition, fees and room and board at a four-year public college or university for in-state students is about $18,400 a year, according to the College Board, a not-for-profit membership group that promotes college access and owns the SAT exam. The same average cost at a private school is about $40,900 a year.

Meanwhile, about 60 percent of students who earned bachelor’s degrees in 2011-12 graduated with debt, borrowing an average of $26,500, reported the College Board in October.

Many specifics of the Murphy-Schatz bill still need to be worked out, including the new affordability and quality standards. The legislation would create a commission of students, education experts and others to recommend minimum standards for colleges to meet to remain eligible for federal funding for student aid, including Pell grants and Stafford loans.

Murphy wants to require colleges to pay back 10 percent of federal funding for student aid they received the previous year if they don’t meet the new standards for two years. Colleges would have to repay 20 percent of the annual federal aid if they still don’t meet the standards for a third year, and they would be deemed ineligible for federal student aid funding if they didn’t meet the standards for a fourth year.

“If a school is raising tuition at 8 percent a year and 50 percent of their students are defaulting on their loans, they probably shouldn’t continue to get Stafford Loans and Pell Grants,” Murphy says.

The legislation also would fund a competitive pilot program that would encourage schools to lower costs and reduce the time needed to complete degrees to soften the financial burden on students.

The bill is similar to President Barack Obama’s new government rating system for colleges that would judge schools on affordability and possibly be used to allocate federal funding, a system drawing skepticism from higher education officials.

Debra Humphreys, vice president for policy at the Association of American Colleges and Universities, said college officials would have several concerns about Murphy and Schatz’s bill, including how the standards would be set. The association, based in Washington, D.C., serves about 1,300 colleges and universities.

Humphreys said, for example, that if standards for loan default rates were the same for every school, colleges that serve low-income students would be at a disadvantage compared with Ivy League schools.

“You run a real risk of building into the system an incentive to only serve the easiest to educate,” Humphreys says. “We have to do a better job educating poor kids. The last thing you want to do is to incentivize an institution to not serve those students.”

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