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President Obama has always emphasized on reduced college costs. He also planned to shift some federal aid from colleges and universities that do not control tuition fees. Arne Duncan, Obama’s education secretary said that the educational institutions should get federal aid on the basis of their performance.

In the past, universities received federal dollars, no matter whether they did a good job of graduating people. Now, our President is targeting campus based aid. The federal aid given to colleges in the form of Perkins loans and work study programs will be increased from $3 billion to $10 billion per year.

Obama also tried to use the “Race to the Top” contest in higher education to achieve this goal based on the success of the same model in K-12 where states were motivated to use higher education aid better. “First in the world” is yet another competition that encouraged innovation in boosting on campus productivity.

The proposals of our President also aimed at allowing students to decide on which colleges and Universities offer the best value. Certain plans of his have faced severe opposition from the Congress which did not approve certain aspects.

The Obama administration has taken various steps already to make grants and loans available to increased number of students. They also facilitate students to repay the loans. Obama announced a series of other proposals to make higher education more affordable that include enhancing tax break for tuition fees and asking Congress to keep loan interest rates from increasing from July.

The administration also proposed changes in the income based repayment program, which allow the borrowers to pay back the loan on a sliding scale, if their payment is more than 15% of their discretionary incomes. The changes to income based repayment program apply to current students only.

Career College programs have also been targeted, especially the programs of for-profit institutions where the number of graduates defaulting loans is high. However, the administration has not yet focused its attention on curbing rising tuition cost at traditional colleges and universities.

The average tuition cost and fees at four-year public colleges have increased to 8.3%. According to the College Board, the higher education cost exceeds $17,000 a year.  Many factors are responsible for this situation such as overt reliance on federal student aid, decline in state dollars and competition for the best professors and facilities.

The former education secretary, Sen. Lamar Alexander said the self-sufficiency in higher education in the U.S is the main thing that makes our country best in the world. He raised a question on whether our President can implement his federal aid plans without hurting students. He felt that it is extremely difficult to shift federal aid away from colleges and universities without hurting them.

Some experts feel that loan commitments of students increase with tuition increases. Limiting loan commitments would reduce the desire and ability of colleges to increase tuition fees. Hence, the administration needs to follow a better, more effective approach to revise our student loan system.