David Jackson,USA TODAY
President Obama opened a two-day bus trip Thursday by outlining a revamped education plan that seeks to tie federal aid to college costs.
"We can't price the middle class -- and people working to get into the middle class -- out of a college education," Obama said during a speech at the state university in Buffalo, N.Y.
Obama proposed a new ratings system to assess how hard colleges are working to keep down costs; federal aid would be based on a school's frugality ratings under a proposal that would require congressional approval.
"A higher education is the single most important investment students can make in their own futures," said a written copy of the plan. "At the same time, it has never been more expensive."
In addition to pressuring colleges over costs via a new ratings system, Obama said his plan has two other goals: Encouraging schools to innovate and compete for students, and helping students manage their loan debts.
The plan calls on colleges to disburse student aid over the course of a semester, rather than as a lump sum at the start. Colleges would receive bonus money for the number of Pell Grant students who graduate.
As for the ever-growing levels of student debt, the plan calls for expansion of a "Pay As You Earn" program that would cap loan repayments at 10% of income.
The plan also says that colleges should offer a greater range of "affordable, high-quality options" that will generate competition with other colleges and drive down prices.
The college plan is the latest in series of speeches on the middle class that Obama has delivered in recent months. Obama said that the rising costs of colleges -- and the accrued debt needed to finance them -- are hurting efforts by graduates to enter the middle class.
The average tuition cost at a four-year public college has increased by more than 250% over the past three decades, according to the White House. Meanwhile, incomes for typical families grew by 16%.
The federal government provides some $150 billion per year in student financial aid, the administration said, while states contribute $70 billion to public colleges and universities.
Obama speaks later Thursday at a high school in Syracuse, N.Y.
The latest presidential bus tour takes place amid turmoil in foreign affairs, including calls on Obama to take forceful action on the possible use of chemical weapons in Syria and the crackdown on protesters by the military government in Egypt.
Obama is also gearing up for a major budget battle in September with congressional Republicans, one that could lead to a government shutdown.
During his Buffalo speech, Obama said college students, parents, and other middle class Americans can't afford another congressional "circus" over the budget.
"That won't grow our economy," Obama said. "That won't create jobs."
The Republican National Committee branded Obama's latest trip as a "Lame Duck Bus Tour" with little substance to talk about.
"Obama's record with youth is wrought with failures from college costs to student loan debt, and his economy has made it difficult for young Americans to prosper," said RNC spokeswoman Kirsten Kukowski.
The bus tour wraps up Friday with a town hall in Binghamton, N.Y., and a speech at a college in Scranton, Pa. The latter event will also feature Vice President (and Scranton native) Joe Biden.