Alexander: President’s Warning to Colleges and Universities Is “Really a Threat to Cut Federal Aid to Students”

Says president first promised to increase student aid, then threatened to cut it

Posted on January 27, 2012

“If the president wants to reduce the cost of going to college, he should … stop overcharging 16 million students who have student loans to help pay for the health care law … and stop imposing new Medicaid mandates on the states” – Lamar Alexander

WASHINGTON – U.S. Senator Lamar Alexander (R-Tenn.), a former U.S. Secretary of Education and past president of the University of Tennessee, today released the following statement on the president’s warning to colleges about increasing their tuition prices, a warning the president made in his State of the Union address to Congress Tuesday evening:

“Within the same paragraph of his State of the Union address, the president first promised to increase student aid, and then threatened to reduce it, saying that if tuition goes up, taxpayer funding will go down. But federal taxpayer funding for colleges and universities is almost all through grants and loans that go to about 20 million students, so his threat to reduce federal spending for colleges is really a threat to cut federal aid to students.

“If the president wants to reduce the cost of going to college, he should do two things. First, he should stop overcharging 16 million students who have student loans to help pay for the health care law: the federal government borrows money at 2.8 percent and loans it to students at 6.8 percent and uses some of that profit to help pay for the new health care law. Second, the president should stop imposing new Medicaid mandates on the states, which are forcing tuition costs to go up. In Tennessee, for example, over the last ten years, Medicaid costs have gone up 43 percent and that’s forced the state to reduce funding to colleges and universities by 11 percent. As a result, tuition has gone up 120 percent over those ten years.

“Colleges do need to become more efficient. I’ve suggested that they could offer three-year degrees to some students. Colleges could also operate more in the summertime, which would make more efficient use of campuses and reduce their costs.”

# # #