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The Obama Administration Proposes $2 Billion More In College Aid

Acting Education Secretary John King Jr., left, accompanied by President Barack Obama, at the White House in Washington.

President Obama has increased college aid by over $50 billion since coming into office. And he's trying to do more.

Acting Education Secretary John King announced two new proposals today that would expand the Pell Grant program, the biggest pot of federal money for students with financial need:

  • Year-round Pell. Currently, students are only eligible for two semesters of Pell grants in a school year. Today's proposal would allow students to get extra money to cover a third session of, say, summer courses.
  • The On-Track Bonus. To complete an associate's degree in two years or a bachelor's degree in four, a student generally needs to earn at least 15 credits per semester. But the technical definition of "full time student" is only 12 credits. The Education Department wants to reward students who take at least a 15-credit course load with as much as $300 extra per year.

Both of these ideas are examples of a current trend in higher education: financial aid used as a carrot to encourage students to complete their degrees. The 2013 graduation rate for first-time, full-time students seeking a bachelor's degree was just 59 percent after six years. And the three-year graduation rates for associate's degrees was a dismal 29 percent. That means a lot of taxpayer-funded assistance goes to students who simply don't finish their studies.

Will offering students a few hundred dollars, or even a few thousand, be enough to get them taking more courses and earning their degrees? So far, the evidence supporting this approach is mixed.

It's also worth noting that today's proposals are just that: budget proposals. And that means Congress will need to weigh in before anything changes.

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