Changes to federal student aid proposed by President Barack Obama in his State of the Union address on Tuesday would make universities' access to federal loans dependent on the educational value of the institution, as determined by student outcomes and cost. If implemented, the plan could potentially impact the College's access to federal aid.
Obama's education agenda also included the announcement of an online comparison tool for prospective university students and a call for greater access to preschool.
Although he praised recent federal initiatives to lower the cost of college, Obama emphasized the need for colleges and universities to reduce their expenses.
"Taxpayers cannot continue to subsidize the soaring cost of higher education," Obama said.
Value, affordability and student outcomes should be taken into account when determining which institutions have access to federal student aid, according to documents released by the White House. Federal loans in higher education must be allocated wisely to ensure a return on the investment.
The new initiative would require accrediting agencies to amend their evaluation systems to include measures of cost and institutional value. Alternatively, an entirely new accreditation system could review the performance of higher education models and colleges to determine federal aid allocation.
This overhaul would require reforming the Higher Education Opportunity Act, which established student and institutional federal aid programs in 1965 and was most recently amended in 2008. The federal government provides over $150 billion annually in direct student loans and grants.
Current federal aid to institutions comes in a variety of forms, including research grants, Pell Grants and an assortment of loans.
Past attempts to lower the cost of high education tended to focus on making loans more affordable to students but have ignored the rising university expenses, government professor Joseph Bafumi said.
The type of policy Obama mentioned in his address could force colleges to reexamine their budgets.
"It's going to be an added challenge for administrators, who it seems will have to deal with more oversight," he said.
Without specific details it is difficult to predict how the proposal could affect the College, financial aid director Virginia Hazen said.
Dartmouth's commitment to meeting students' full financial need could end up costing the College more money in the event that federal loans are reduced. The high price tag of a Dartmouth education could prompt closer federal scrutiny of the College, Bafumi said.
"It sounds like it would affect every college and university, but it might be the most notable ones and most expensive ones that will be looked at most closely," he said.
Obama also announced the release of a "college scorecard," an online tool that would allow students and families to compare colleges by cost and quality.
The financial aid office has been preparing a "financial aid shopping sheet" for the information contained on the scorecard, Hazen said.
The tool subtracts the grant aid students would receive from the College's sticker price to present a more realistic cost assessment.
"The idea behind it is a good one because it requires transparency," Hazen said.
Falling just below the "high" cost range, Dartmouth undergraduates pay an average net price of $20,814 per year and borrow $13,974 in federal loans over their course of study, earning a median borrowing rating of "Low," according to the Dartmouth scorecard on the White House's website.
The scorecard also lists that 95 percent of Dartmouth students graduate within six years and 1 percent of Dartmouth students default on federal loans within three years of beginning repayment, in comparison to a national average of 13.4 percent.
Obama began the education reform section of his address with a call to increase preschool access for low-income children.
This initiative, if successful, may impact the College, Bafumi said.
Although different research studies disagree on whether early schooling causes a measurable difference in student ability past a fourth grade level, improvements to public preschool in the U.S. could have long-term implications for how many students continue education after high school, Bafumi said.
"If education reform has a real positive impact, which is hard to know if it will, it's possible that there will be more students applying to colleges like Dartmouth," he said.
In his address, Obama also spoke about strengthening high school programs in technology, science and engineering in order to better prepare graduates for the workplace.
At the watch party on Tuesday, College Democrats president Mason Cole '13 said he was glad to hear that Obama's education agenda includes efforts to improve public high schools.
"I think a lot at Dartmouth a lot but not all of us are privileged to come from good high schools, but it's not the situation for all students and definitely not the situation for America as a whole," Cole said. "Empowering people to get the skills out of high school they need to get a job is very important, while also making college more affordable."
