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Obama: Wealthiest Americans Should Foot Community College Bill

Jan. 21, 2015
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President Barack Obama wants the wealthiest Americans to foot the bill for his free community college proposal.

In his State of the Union address Tuesday night, Obama called for increased taxes on higher-income earners to pay for middle-class tax breaks and to make two years of community college free for qualifying students.

Obama unveiled his community college plan earlier this month, but without much in the way of how it would be paid for. On Tuesday night, the president outlined a Robin Hood-style idea that would tax the rich to help the middle class.

“Whoever you are, this plan is your chance to graduate ready for the new economy, without a load of debt,” Obama said.

Under the president’s proposal, the federal government would pay for 75% of the cost of two years of tuition, with states choosing to participate in the program picking up the rest. If all states participated, the White House estimates that some 9 million students could benefit, and that a full-time community college student could save an average of $3,800 in tuition per year.

Putting the plan into place would cost the federal government $60 billion over the next decade, the White House has said, and would be paid for by some of the proposals the president outlined Tuesday night—including raising the top capital gains tax rate, removing several tax breaks and provisions that benefit the wealthiest Americans and imposing a new fee on large financial institutions that borrow too much.

Obama said in his speech that he will send Congress his budget in two weeks.

U.S. Sen. Joni Ernst of Iowa did not mention the community college plan in delivering the official Republican response to the State of the Union, but several Republicans have balked at the proposal’s price tag. They want states to be able to control their own destinies when it comes to post-secondary education.

Obama’s proposal is modeled after a similar program in Tennessee that uses lottery funds to pay for two years of community college in the state. Chicago is also looking at similar legislation.

“By the end of this decade, two in three job openings will require some higher education,” Obama said. He spoke of the wide range of Americans who choose community college and then addressed those students directly, telling them “you’ve got to earn it—?you’ve got to keep your grades up and graduate on time,” alluding to the requirement that students maintain a 2.5 grade-point average, before imagining what he sees as the outcome.

“I want to spread that idea all across America, so that two years of college becomes as free and universal in America as high school is today. And I want to work with this Congress to make sure Americans already burdened with student loans can reduce their monthly payments, so that student debt doesn’t derail anyone’s dreams.”

Many analysts say the president’s proposal is dead on arrival in the Republican-controlled Congress. Still, even if it fails, administration officials say the proposal is meant to get people talking about community college and making higher education more affordable for more Americans.

The cost of college has increased twelvefold in the past three decades, and while a new report shows those costs slowed some in the past year, issues of affordability and student loan debt still keep many people away from higher education

More students are turning to lower-cost schools like community colleges for that very reason. In 2013, 34% of U.S. students enrolled in a two-year public college, up 4% from the year before, according to a report by Sallie Mae.

Meanwhile, there are still ways you can find help paying for college.

A good first step is filling out the free application for student aid (FAFSA) to see if you qualify for federal grants, scholarships, loans or work-study. Check out this FAFSA guide to learn what you may qualify for based on your family situation. You can also search for scholarships nationwide on the NerdWallet website.

You can apply for nonfederal financial aid through the CSS/Financial Aid Profile, a form powered by the College Board that’s used by some 400 schools across the country. It costs $25, plus additional fees if you want to send it to more than one school, but most schools don’t require it. Also be sure to check with your community college about local financial aid options.