A plan proposed by President Obama last week could affect how much federal financial aid the university receives by 2015 and how much students receive by 2018.

The president’s proposed “college affordability plan” will create a rating system for public institutions before the 2015 academic year that will assess colleges on tuition, percentage of low-income students, graduation rates and students’ debt level upon graduation. The president hopes that Congress will then back the next part of his proposal to award funding based on the ratings. According to this model, by 2018, student aid would largely be tied a public institution’s success or value as determined by the rating system.

Looking at the numbers, USM may not fare well in the new system. According to the College Affordability and Transparency Center, USM ranks somewhere in the middle to high range for costs. The average net price, or the amount an undergraduate, in-state student pays to attend USM each year after financial and grants, is $18,156 per year compared to the national average of $10,863 per year. USM takes the biggest hit in retention, with a 32.9 percent graduation rate – a figure that falls well on the lowside of the range.

University of Maine officials got wind of President Obama’s proposed plan this week, and so far, their reaction has been positive.

Peggy Markson, public relations manager for the University of Maine System, said that while she is still waiting to learn more about the details of the president’s plans, she feels that it may largely be in-line with the goals of the UMS Board of Trustees.

“The overarching goals of keeping college affordable and helping people graduate is definitely in line with our goals,” she said.

According to information released by the White House, declining state funding for higher education has been a major cause for rising tuition prices and one of the main reasons that students are shouldering the rising costs of education. Tuition in the U.S., as a share of university revenues over the past 25 years, has nearly doubled from 25 to 47 percent, and student borrowers now graduate with $26,000 in debt on average. Average college tuition in the U.S. at public four-year universities increased more than 250 percent over the past 30 years, according to College Board and census data.

USM itself has been squeezed by economic and financial pressures. The University of Maine System made a pledge to freeze tuition in the fall of 2012 for two years if the state promised to hold appropriation flat for the same duration. However, the UMS fiscal year 2014 Operating Budget states that while the state appropriation has been held flat, “appropriation to the UMS has been declining as a percentage of the state budget and as a percentage of the UMS budget for the past twenty years.”  State funding for 2014 fiscal year is now $6.2 million below the fiscal year 2008 level. All of these factors have led to a financial climate of chaos for the university with an itinerary of over $12 million in cuts outlined for the next four years.

President Obama will create the ratings through executive action; however, re-allocating financial aid based upon those ratings will require congressional approval. While university officials in Orono are waiting for more details, it is not clear whether or not Obama’s plan will make it through Congress.


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