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College Costs Are A Big Test For Candidates

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The Associated Press

Published: October 6, 2008

Democrat Barack Obama and Republican John McCain have offered similar campaign pronouncements: A college education should be affordable to anyone, and the process of getting federal aid is more complicated than it should be.

But there are differences in how each would tackle the problem.

College Prices

Washington provides $86 billion annually in grants, loans and tax benefits to support students, but state budgets mostly determine public colleges' list prices.

Obama: Offers proposals that are more detailed - and more expensive. They reflect an assumption that government should do more to help students pay for college.

McCain: Has proposals that are more general and emphasize streamlining the aid system - improving but not necessarily expanding it. He calls for making more information available to parents and eliminating wasteful spending on pork-barrel university research projects.

Student Loans

About $60 billion - nearly half of all public and private student-aid money - comes via the federal student loan program.

Obama: Proposes moving the whole system to direct government loans and eliminating subsidies to banks.

McCain: Supports the current dual system of government and private loans.
Pell Grants
For low-income students, Pell Grants, which don't have to be repaid, are the most important federal aid program. This year, 6 million students - virtually all with family incomes under $50,000 - will receive Pell Grants of up to about $4,700.

Obama: Pledges that Pell Grants will "keep pace" with increases in the cost of college.

McCain: Does not commit to specific increases but would consider raising Pell awards if there is a pressing need and the budget allows, a senior adviser says.

New Programs

Obama: Plans to provide most students with up to $4,000 a year in tax credits for college, in return for 100 hours of community service. The credit would be fully refundable, so low-income families who don't pay enough in taxes to benefit from the full tax credit could still get $4,000. Aid would be awarded based on prior-year tax data. An Obama adviser says the program, estimated to cost $10 billion, would be paid for by cutting other federal programs, contracting and procurement reform, and eliminating spending on special projects pushed by members of Congress.

McCain: He isn't proposing new programs to help with college costs, but a senior adviser says the GOP candidate is committed to helping families, especially low-income ones, pay for college.

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