COLLEGE ACCESS, AFFORDABILITY AND COMPLETION

Earning a college degree is the clearest path to the American dream and the benefits and security of 

the middle class—it is an economic imperative, not a luxury. But the growing need for higher 

education is coming at a time when the cost of college is rising to levels that are increasingly 

unaffordable for many American families and threatens our ability to meet President Obama’s

ambitious goal for America to have the highest proportion of college graduates in the world by the 

end of the decade. The Administration’s landmark investments in Pell Grants, coupled with the 

creation of more generous tax credits and loan repayment options, have helped more Americans 

access a college education and helped slow increases in the net price that students and families pay 

for college. But we cannot expect Federal student aid to keep pace with rising college costs 

indefinitely. Instead, we need systemic reforms that address the root causes affecting college 

affordability, while also creating incentives to provide greater quality and value to students—a task 

the Federal government cannot take on alone. 

The President’s Budget outlines a plan for States, colleges, families and the Federal government to 

share in the responsibility of meeting our challenges to higher education access, affordability, and 

completion. It would maintain the Federal investment in postsecondary student aid and increase the 

maximum Pell Grant to $5,785—while also challenging and helping States, colleges and families to

work together to slow the growth in tuition and fees.

Preserve Student Financial Aid: The Federal government must keep doing its part to help 

students and families afford college through its investments in financial aid. The budget strengthens 

the Federal government’s investments in financial aid by:

• Increasing the maximum Pell Grant Award to $5,785—a crucial source of support that 

helps more than 9 million low-income and middle-class students access and afford higher 

education. 

• Increasing Federal Work-Study by $150 million—which would provide over 110,000 

new work-study positions. This represents the first step in the process of moving towards 

the President’s goal of doubling the number of work-study jobs.

• Providing a long-term fix for student loan interest rates—the 2014 request proposes to 

provide long-term stability in the loan programs by reforming the interest rate calculation for 

new loans so that they would carry a fixed rate that is annually pegged to market rates. The 

projected interest rates under this policy would be lower than the current rate and would 

only go up as market interest rates increase.

• Expanding “Pay as You Earn”—the request would make the Pay as You Earn plan 

established in late 2012 available to all eligible borrowers currently participating in incomebased repayment, offering borrowers the opportunity to limit their monthly payments to no 

more than 10 percent of discretionary earnings instead of the current 15 percent. 
Encourage State Reform: State funding and policies are the biggest drivers of increased tuition at 

public colleges and can make it harder for students to complete their degrees. We need to help 

States pursue systemic reforms to improve affordability and quality in higher education, while also 

helping more low-income and first generation students enter and complete college. The President’s 

budget accomplishes these goals through the following investments: 

• Race to the Top: College Affordability and Completion ($1 billion). States have a major 

role to play in adopting reforms that control the cost of higher education while also 

improving access and quality. Race to the Top: College Affordability and Completion would 

provide competitive grants to States that demonstrate the capacity and willingness to 

undertake reforms and pursue innovations designed to improve college affordability and 

quality. This investment would incentivize States to maintain adequate levels of funding for 

higher education, revamp the way States finance higher education, align entry and exit 

standards among K-12 education, community colleges, and universities to facilitate on-time 

completion by smoothing transitions from high school into college and between colleges, 

and address other important long-term causes of cost growth. A significant portion of funds 

would be passed through to institutions to scale productivity reforms that can reduce costs 

and help students complete college faster. 

• State college access and completion initiatives ($150 million). The budget maintains 

mandatory funding for the College Access Challenge Grant program, which provides 

formula aid to States to bolster their access, persistence, and completion activities. 

Institutional Innovation and Reform: We need to provide incentives for colleges and universities 

to keep costs from growing, serve low-income students well, and provide good value. We also have 

to foster a culture of innovation on campuses to help them meet these goals. The President’s budget 

makes the following investments in driving reform and innovation at institutions:

• A new “First in the World” fund ($260 million). To improve student outcomes, we need 

to encourage institutions and other higher education stakeholders to come up with 

innovative solutions to address the completion challenge and improve higher education 

productivity, build evidence of what works through rigorous evaluations, and scale up and 

disseminate those strategies that prove successful. This initiative would be composed of 

three parts:

• A competitive program modeled on the successful i3 program for K-12, which

would build evidence of what works through rigorous evaluations, and scale up and 

disseminate those strategies that prove successful. This program would include a 

strong emphasis on college access strategies for low income, minority and first 

generation college-goers.
• A competition to stand up new quality validation systems that can identify 

appropriate competencies, assessments, and curricula for high-need fields. This 

would support the creation and scaling of innovative, low-cost providers by giving 

them tangible student learning benchmarks and goals to work toward.

• A pay for success program tied to these new validation systems to reward all types of 

providers that can successfully prepare students for free two-year degrees with 

rigorous demonstration of learning.

The validation systems competition and pay for success project would lay the 

groundwork for the President’s call in his State of the Union Address for Congress to 

either: (1) add value and affordability measures to the current accreditation system or (2) 

set up an alternative to accreditation that would provide a path for new providers to 

access student financial aid based upon rigorous performance standards.

• Reform Campus-Based Aid to encourage value and completion. The 2014 request 

seeks to expand the Campus-based aid programs—the Supplemental Education Opportunity 

Grant (SEOG), Federal Work Study (FWS), and the Perkins Loan Program—to make 

available over $10 billion in aid to students and prevent the scheduled termination of the 

Perkins loan program this year. The President’s budget would also reform the way these 

funds are distributed to reward institutions that demonstrate a commitment to providing 

their students a high-quality education at a reasonable price and provide good value. As part 

of these reforms, the request includes $150 million in additional funds for FWS to help the 

program focus more on institutional success in placing their students in positions that 

meaningfully complement students’ educational programs or future career goals.

Empower Students and Families with Improve Transparency: Students and families can face 

many non-financial barriers to college, but two in particular stand out: difficulty choosing the school 

that best suits their needs and getting the preparation necessary to succeed in higher education. That 

is why the Department rolled out a “College Scorecard” for all degree-granting institutions this

January that presented clear information for students and families to help them choose a college that 

is priced affordably and that is best suited to meet their needs and help them attain their career and 

educational goals. 

Expand Opportunities for Students to Earn College Credit in High School: The request 

expands opportunities for students to earn college credit in high school, which increases their 

readiness for college and allows them to complete college more quickly and at a lower cost. It 

includes $300 million to support a new High School Redesign competition that will fund district 

partnerships with (i) postsecondary institutions and (ii) business, industry, non-profits or community 

based organizations. These partnerships would work toward the goal of ensuring that all of their 

students graduate from high school with college credit and career-related experience. In addition, 

the request includes $42 million to expand access to dual enrollment programs to approximately 
20,000 students. These programs would allow high school students and adult learners to 

concurrently receive college credit in courses that target local workforce needs. Grants would go to 

partnerships of colleges, districts or adult education providers, and State agencies to create or 

expand these programs and participating students would receive additional support services as well 

as funds for tuition, fees, and supplies to cover the costs of their college courses. The request also 

includes $102 million for College Pathways and Accelerated Learning, a new authority under the 

Administration’s Elementary and Secondary Education Act reauthorization proposal designed to 

increase graduation rates and college enrollment and success by providing college-level and other 

accelerated courses in low-income schools, including Advanced Placement and International 

Baccalaureate courses. 

Additional Investments: The Department’s long-standing support for college access and 

institutional support programs continues in 2014. These investments include:

• Federal TRIO Programs ($840 million). Meeting the 2020 college completion goal 

requires increasing the number of students who are well-prepared for college and succeed 

once they enroll. The TRIO programs are crucial for expanding that supply of college-ready 

students. These programs, which include Upward Bound and Talent Search, help lowincome and first generation college students access and succeed in higher education. 

• GEAR UP ($302 million). This program provides grants to States and partnerships to 

provide early college preparation and awareness activities for entire cohorts of students at 

low-income middle and high schools throughout the nation. 

• Title III Aid for Institutional Development programs ($431 million in discretionary 

funding and $167 million in mandatory funding) and Title V Hispanic Serving 

Institution (HSI) programs ($109 million in discretionary funding and $112 million in 

mandatory funding). We cannot meet the President’s 2020 goal without strengthening 

minority-serving institutions (MSIs) and HSIs. These schools play a crucial role in the higher 

education sector because they enroll a sizeable number of the low-income, first generation, 

and minority students that are in college today. Because these students traditionally have 

lower graduation rates than others, it is important to provide institutions serving large 

numbers of them with the support needed to help students graduate.