With the presidential race finally over and President-Elect Barack Obama preparing to take office in January, it seems a good time for us to begin discussing his plans for our higher education system.

Problems and Solutions

The President-Elect’s platform described what he sees as the most important troubles of our current higher education system:

• Rising college costs and the resulting student debt
• The complicated process of obtaining financial aid and tax credits

According to the official Barack Obama website, President-Elect Obama has proposed two solutions to amend these problems, :

• The American Opportunity Tax Credit
• Simplify the Financial Aid application process

The American Opportunity Tax Credit

As president, Barack Obama plans to introduce a new tax credit (in addition to the current Hope and Lifetime Learning tax credits) called the American Opportunity Tax Credit. This $4,000 credit is meant to help offset the high cost of tuition. Combined with the current credits and other academic, cash flow and tax reduction strategies, it could be a powerful tool to help families reduce the cost for college.

Like Bill Richardson’s once-upon-a-time loan forgiveness plan, this chunk of student aid has a string attached: Any student who receives the credit will be required to participate in 100 hours of community service. That’s a good deal for students when you look at it as $40 per service hour! ($4,000/100 hrs of service.)

Bye Bye FAFSA?

Most parents dread filling out the Free Application for Federal Student Aid (FAFSA)–in fact, some dread it so much that a staggering 1.8 million students missed out on aid in 2003-04 because they didn’t file it!

While many have tried to simplify the FAFSA, the President-Elect’s plan is even simpler: He wants to eliminate the FAFSA altogether. Instead, filing for aid would be as simple as checking a box on your annual tax return.

Whether either of these plans comes to fruition remains to be seen, as clearly the next president has many critical issues to tackle once he takes office.  Stick with me to keep up-to-date on the latest higher education developments in Washington!

All the best,
Deborah Fox

photo: Red, White, and Blooo by katagaci