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Paying for College

President Obama's New College Affordability Plan

President Obama announced a new plan last Thursday to increase college affordability for students across the country. The proposal, officially titled A Better Bargain for the Middle Class, lays out three main goals tied to financial aid allocation, technology and accountability and loan repayment. To help you better understand the proposal, here is a simplified summary and explanation of the main points:

Pay Colleges and Students for Performance

  • Introduce a new rating system by 2015, to be implemented by 2018, to evaluate colleges’ ability to provide an affordable education while graduating a satisfactory percentage of students. Each college’s rating would directly impact the amount of total financial aid funding it receives from the federal government

  • Allocate financial aid to students based on individual student performance

Promote Innovation and Competition

  • Encourage colleges to provide additional online courses and other innovating learning opportunities

  • Urge colleges to award credits to students for courses completed at other institutions

  • Publish college ratings to help students make informed decisions regarding college choice

Ensure Student Debt is Affordable

  •  Cap federal student loan repayments for all borrowers at 10 percent of monthly income

  • Reach out to all students behind or overburdened with federal student loan payments to provide information on all repayment options

For full details on Obama’s plan, check out the White House’s Fact Sheet.

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