College tuition costs: Hold 'em down or else, Obama says

College tuition costs could determine how much federal aid colleges and universities get, President Obama says in a speech at the University of Michigan. College tuition costs rose 7 percent at the university this year. 

President Barack Obama's goal of making higher education affordable came with a strong message to universities Friday: Hold down tuition or risk losing federal student aid money.

During a speech at the University of Michigan, Obama said students who attend colleges and universities that slow down what he called skyrocketing tuition costs will get more federal student aid. If students attend schools that don't keep costs down, the institutions won't get as much aid.

"I'm telling Congress we should steer federal campus-based aid to those colleges that keep tuition affordable, provide good value, serve their students well," Obama said. "We are putting colleges on notice _ you can't keep _ you can't assume that you'll just jack up tuition every single year. ... We should push colleges to do better. "

The federal aid _ in the form of grants, work study and loans _ goes to the student, who then passes it back to the university. U-M took in $136 million in federal student aid in 2010-11.

Michigan's universities have been steadily increasing tuition for the past decade, including an average raise of nearly 7 percent for this year.

University leaders said they needed to increase tuition in large part because of cuts in state aid. Universities lost 22 percent of their state funding this school year, but that cut was rolled back to 15 percent if they kepttuition increases under 7.1 percent.

During his speech, Obama said tuition is steadily increasing in states across the nation.

"So we're challenging states: Take responsibility as well on this issue," he said. "What we're doing is, today we're going to launch a Race to the Top for college affordability. We're telling the states, if you can find new ways to bring down the cost of college and make it easier for more students to graduate, we'll help you do it. "

Michigan university officials praised Obama's remarks on the need for states to increase funding.

"If the state does its part, universities should be challenged," U-M President Mary Sue Coleman said. Said Michigan State University President Lou Anna Simon: "Now is the time for the federal and state governments, along with colleges and universities, to step up to the plate to ensure that we can continue to offer a world-class education _ one that will maintain our nation's and our state's competitiveness in a changing global economy _ at an affordable price."

Michigan Gov. Rick Snyder's spokeswoman Geralyn Lasher said the state cannot keep spending money it doesn't have and using accounting gimmicks and one-time fixes to get a budget passed.

"As a result, many areas of the budget had to be cut, including funding to higher education, in order to put Michigan's fiscal house in order," she said. Some critics of university spending said a loss in state aid isn't the only reason for the tuition increases.

"There's a lot of highly paid people there who keep getting raises," said Mark Ickles, 47, of Ypsilanti, Mich., whose daughter is a freshman at MSU. "I think there's a lot more fat there, and they've got a lot of money sitting in reserve accounts they could use to keep costs down."

Katie Taylor graduated from U-M in 2008 with a master's degree in social work. Even with federal grants and scholarships, the out-of-state student from North Carolina ended her college years with $150,000 in debt. She said she appreciates Obama's efforts to ensure that parents and students really understand how much college is going to cost.

Ella Weber, 19, a U-M student from East Lansing, Mich., said she fears the trickle-down effect could result in U-M's inability to provide as much financial aid as students need.

"I have a lot of student loans, and I would have like to hear more about where he's going to get the money for these programs," said Weber. "It's pretty scary, but the university here does a pretty good job of offering grants and aid. This might end up being more of a financial burden on all students."