Editor's Note: This is a joint article by Acting Secretary of Education John B. King Jr. and Shaun Donovan, Director of the Office of Management and Budget, that first appeared on LinkedIn.
Today's good-paying jobs increasingly require a high-quality post-secondary degree or credential. That's why the Obama Administration has made historic investments in student financial aid to help ensure college stays within the reach of all Americans.
We increased the maximum Pell Grant by more than $1,000 and created the American Opportunity Tax Credit to help American families pay for college--up to $10,000 over four years of college. We kept student loan interest rates low, and allowed more borrowers to cap their loan payments at 10 percent of their monthly income through the President's Pay As You Earn plan (PAYE). More than 4 million students have already enrolled in PAYE and related repayment plans, and millions more are expected to benefit in the coming years. Our investments in students have helped to support more students earning degrees than ever before.
Still, there's more work to be done. Today, only 60 percent of those enrolled in bachelor's degree programs complete their education. Even for those who do complete, at least one-third take longer than expected to graduate, forcing them to bear additional costs and leave school with higher debt burdens. And the most expensive degree is the one you don't complete. Borrowers who drop out of college face a three times greater risk of defaulting on their student loans than borrowers who graduate.
We need more students completing college on a faster track, which will lower their costs of college and likely reduce their student debt. The President, through proposals to be released in his forthcoming budget, is pushing to support more students reaching this goal by proposing $2 billion in additional Pell Grants next year for students working towards their degrees. If Congress takes action on these two new proposals, 3 million students next year could benefit.
Currently, many full-time students exhaust their annual Pell eligibility after just two semesters; and, as a result, are unable to pay to continue their coursework until the beginning of the next academic year. But, with the Pell for Accelerated Completion proposal, nearly 700,000 students next year could receive an additional $1,915, on average, to help them make significant progress toward completing their degrees on time or even faster. Students would then be supported in taking more robust course loads during the fall, spring or summer terms.
Our second key proposal--the On-Track Pell Bonus--could help 2.3 million more students complete college on time by providing an increase to their maximum Pell awards for students who stay on track to graduate by taking 15 credits (or 5 courses) each semester, rather than the standard 12 credits (or 4 courses) required for the maximum Pell award. This increase would encourage students to stay on track to finish more quickly, at a lower cost, and with less debt.
We look forward to working with Congress on these two new proposals, along with our existing proposal to continue indexing the Pell Grant to inflation beyond 2017, helping 9 million students keep up with the rising cost of education within a decade.
We have an opportunity to invest deeply in the success of America's students so we can once again lead the world in college attainment, increasing our nation's economic competiveness, and strengthening our democracy. We don't have a moment to waste.
Shaun Donovan is the Director of the Office of Management and Budget.
John B. King, Jr. is the Acting Secretary of Education.