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Obama: Universities should make spending more transparent

Andy Gottesman / The Lantern

President Barack Obama issued a call Monday for greater transparency in university spending.

“There should be a pie chart at every university that says, ‘Out of every dollar you spend in tuition, here is where your money is going,'” Obama said to a group of college journalists during a conference call. College students “should have some good understanding of that and be able to make better decisions as a consequence of that information.”

He said students and parents, as consumers, need to put more pressure on universities to make sure costs stay under control and money is spent in the right places.

“When I go to some public colleges and universities and I look at the athletic facilities that exist these days or the food courts or other things that have to do with quality of life, it’s sure a lot nicer than when I was going to college, and somebody has to pay for that,” Obama said. “Part of what we have to examine is, ‘Are we designing our universities in a way that focuses on the primary thing?’ — which is education.”

Jim Lynch, director of OSU Media Relations, said the university is in a unique situation because the athletic department actually provides money for the university, rather than the other way around.

“We are very proud of the fact that our Department of Athletics is one of the few schools in the country to operate without any state or university subsidies,” Lynch said. “Not a penny of tuition or tax dollars” is used.

OSU’s budget, which includes charts on spending, is posted online by the Office of Resource Planning.

The Lantern has repeatedly asked how much the university pays performers brought to campus by the Ohio Union Activities Board. Officials say those costs are “trade secrets.”

“Unfortunately, it would not be wise for the university to release how much we pay to bring in national acts, as it would put us at disadvantage when negotiating future entertainers,” Lynch said.

Increasing transparency in college spending is only part of Obama’s goal to improve higher education in the United States.

Students “are going to drive the future success of the United States,” he said. “The single most important step we can take is to make sure that every young person gets the best education possible. Countries that out-educate us today are going to out-compete us tomorrow.”

Obama said that as a nation, the U.S. has fallen from first to 12th in college graduation rates for young people in a single generation. His goal for the next 10 years is to reclaim that No. 1 spot.

He has designed several changes to reach that goal, the first aims to reform federal student loans.

“Instead of handing over $60 billion in unwarranted subsidies to big banks … we are redirecting that money so that it goes directly to students,” he said.

Obama said he plans to increase the value of Federal Pell Grants, which do not have to be repaid. Additionally, beginning in 2014, students who take public service jobs will be able to cap their debt at 10 percent of their salary.

“If you go into something like teaching, for example, public service jobs of one sort or another, (your debt) is forgiven after 10 years,” Obama said.

The administration is also tripling its investment in college tax credits for middle class families with college students.

However, Obama said later that tax revenue at the state level needed to be increased so public universities would be less inclined to increase tuition year after year. Obama said that he expects increased tax revenue to come as the economy is strengthened.

The underlying caveat to the administration’s goals, however, is the strength of the economy.

“If I keep on increasing Pell Grants and increasing student loan programs and making it more affordable, but higher education inflation keeps on going up at the pace that it’s going up right now, then we are going to be right back where we started,” Obama said.

Tuition at OSU recently increased by 3.5 percent both Summer and Autumn quarters. According to a press release from the College Board, most recent data shows that the national percent change for public four-year universities from the ’08-’09 school year to the ’09-’10 school year was 6.5 percent. During that time, OSU was under a state-imposed, two-year tuition freeze.

Last, Obama said his health care plan is designed to help college students and their families handle increasing costs of higher education.

“Under the Affordable Care Act, young adults can now stay on their parents’ health plans until they are 26 years old,” Obama said.

This program is designed so that college graduates who have not found a job or who are not offered health care by their employers will be able to save money on health care.

“Your parents’ costs should not go up substantially on this plan,” Obama said. “And that should give you a little bit of a cushion as you look for jobs coming out of college.”

John McClelland, spokesman for Ohio GOP, disagreed with Obama.

“It’s pretty pathetic that the only thing most young adults have to look forward to is not a career on their own, but rather staying on Mom and Dad’s healthcare plan until age 26,” McClelland said. “It’s even worse that when they finally get a paycheck, their tax burden will eventually go up because the Democrats can’t seem to stop borrowing their money to feed a bad spending habit.”

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