The basic idea is to give more student aid to colleges that admit more disadvantaged students, that show progress in lowering costs and raising scholarships, and that shepherd students to earn a degree. To measure that performance, the government would create a rating system to compare similar colleges, a potentially useful consumer tool that would also serve to shame institutions that do not measure up.
The rating system would examine a college’s accessibility, looking at the percentage of students receiving Pell Grants; its affordability, tied to tuition, scholarships and financial aid; and its outcomes, based on graduation rates, advanced degrees and the salaries earned by graduates. Students would be required to show progress toward a degree before receiving continued aid, and schools would be rewarded for developing innovative programs to serve more students at lower costs. All student borrowers would have a cap on their loan payments of 10 percent of their monthly income, expanding the current system.
So, it sounds like under Obama's new system you'd get the most federal financial aid for going to Harvard. After all, Harvard has a nearly 100% graduation rate. With its endowment of $32,012,729,000, Harvard gives out lots and lots of financial aid (that's why its basketball team has gotten so good lately -- it can't give out athletic scholarships, per se, but it now gives out so much financial aid to high five figure and low six figure parents that it can now give a free ride to middle class black kids who happen to be extremely tall and good at dunking). And Harvard has many accomplished and well-paid graduates. (Just ask one and they'll tell you.) If Harvard feels motivated to get the smartest Pell Grant students in the country, well, Harvard will get the smartest Pell Grant students in the country.
In contrast, if you are just some loser who can only get into, I dunno, Tufts, well, don't expect as much help from the taxpayers as your betters at Harvard rake in. As the Lucky Jim principle says, there's no end to the way nice things are nicer than less nice things. So, why shouldn't the Obama Administration give Harvard students more aid than Tufts students?
So, is the Obama Administration's message to America's colleges: be more like Harvard?
Or am I totally using the wrong examples and this isn't about high-end schools at all, this is about crushing low-end for-profit colleges? I believe in the magic of the market and all that, but more than a few for-profit colleges just seem focused on getting gullible people with two-digit IQs to take out loans to take classes in fields where they aren't smart enough to make a career.