White House Report: Making College Affordable for Millions of Americans
A full version of this report is attached and can be found HERE.
Tomorrow at Lake Area Technical College in South Dakota, the President will underscore the importance of making community college available to all responsible students as part of his America's College Promise Campaign, one of several major proposals that build on the historic investments the President has made in college affordability and quality.
Nearly a century ago, a movement that made high school widely available helped lead to rapid growth in the education and skills training of Americans, driving decades of economic growth and prosperity. America thrived in the 20th century in large part because we had the most educated workforce in the world. A quality higher education continues to be the single most important investment students can make in their own futures and that we can make in the future of our nation. But other nations have matched or exceeded the United States’ investment in higher education. Today, more than ever, Americans need more knowledge and skills to meet the demands of a growing global economy without having to take on decades of debt before they even embark on their career.
Over the past six years, the President and Congress have:
Increased Pell Grant funding, the government’s primary scholarship program, by 70 percent, and increased the maximum Pell Grant award by $1,000 since 2008. As of 2015-16, Pell Grants will have helped more than 2 million additional students per year.
Created the American Opportunity Tax Credit (AOTC), providing up to $2,500 per student, per year to help cover the cost of tuition, fees and books. In 2016, the AOTC will provide 10 million students and families an average benefit of about $1,800. Families benefitting from the creation of the AOTC will receive an additional $1,000 on average per year compared to the tax credits available prior to its enactment. Combined, the AOTC and the Lifetime Learning Credit will provide families with more than $20 billion of assistance in 2016, an increase of about 170 percent value relative to the value of education tax credits in 2008.
Taken together, Pell Grants and the AOTC will continue to provide students and families $50 billion in aid next year to help them afford college. In part as a result of these investments, and despite deep cuts to higher education in many states, the net price students pay – tuition after scholarships and tuition-based tax credits – has actually fallen at four-year private colleges and remained constant at community colleges. At community colleges, the average full-time student could save $3,800 per year under the President’s America’s College Promise Proposal, which would make two years of community college free for responsible students.
Many states responded to the recession and resulting budget shortfalls by cutting funding for higher education. As a result, public four-year colleges faced significant cuts to their state funding. The President’s investments in higher education, including Pell Grant funding and AOTC benefits, have helped fill the gap so that students can still afford the rising costs at public four-year universities.
This year, President Obama proposed to build on this progress with a bold plan to make community college free for responsible students, ensure that the Pell grant is never eroded by inflation, and simplify, expand and make permanent the American Opportunity Tax Credit. He is also working to make student loans more affordable – including expanding current regulations that cap student loan payments at 10 percent of income – and encouraging innovation and competition to bring down the cost of college.
However, despite these hard-fought gains in college affordability, Republicans in Congress have proposed a budget that slashes these and other investments that benefit students and their families. The budget blueprint agreed to by House and Senate Republicans last week would eliminate $90 billion in dedicated Pell Grant funding and let the American Opportunity Tax Credit expire after 2017 – resulting in a tax increase on millions of students and families.
And the Republican budget does nothing to end the harmful effects of sequestration, capping discretionary funding for education and other key areas we need to strengthen the economy and expand opportunity.