In the latest Obama campaign ad, we’re back to the threat if you elect Mitt Romney, you’re making college unaffordable for too many: “Romney’s plans could cut college aid for nearly ten million students and eliminate the tax deduction for college tuition,” states the narrator in the ad, after showing a clip of Romney saying, “Take a risk, get the education, borrow money if you have to from your parents.” Watch:
First, let’s look at that Romney quote. The Obama ad introduces the clip by saying, “Mitt Romney on how to pay for college and start a business.” But that distinction is lost after the soundbite is shown: the narrator then states, “Hope they [your parents] can afford it,” before the ad goes on to attack how Romney’s plan could potentially affect government subsidies directed to college students. So the impression the viewer is left with is that Romney was talking about either college costs or at least about both college costs and business start-up costs.
But according to the Romney campaign, Romney’s advice to “borrow money if you have to from your parents” was about business loans, not college costs. In fact, CBS ran this correction to their piece covering the quote: “This story corrects an earlier version. An aide to Romney said he was referring to business loans when he suggested students borrow money from their parents.” So Romney wasn’t ever talking about how to pay for college when he said that.
Now, would Romney “cut college aid for nearly ten million students”? Well, according to the source (an OMB blog post) provided by the Obama campaign in the press release accompanying the ad, that number is arrived at by looking at the Ryan budget with a certain assumption, namely that “the cuts are distributed equally across the Budget.” But as I wrote in April, “However, the Ryan budget doesn’t rely on that 14.3 percent cut being evenly distributed. Instead, the budget proposes that the program become financially sustainable by in part curtailing eligibility for the program, so that it’s more targeted toward genuinely low-income students. So yes, there would be cuts, but they would be in terms of eligibility, not in maximum amount granted.” And for what it’s worth, Obama — despite letting his campaign holler in outrage over these possible changes in funding in the Pell Grant program — has no serious plan himself to keep the program funded in the long-term, according to the New America Foundation’s Jason Delisle.
The “nearly ten million students” number comes from the supposition that that everyone’s Pell Grant would be slashed. I’m not sure what the exact number of students affected would be if the Ryan budget’s eligibility change was implemented. The suggestion in that budget is “Roll back certain recent expansions to the needs analysis to ensure aid is targeted to the truly needy. The Department of Education attributes 14 percent of program growth since 2008 to recent legislative expansions to the needs analysis formula.” According to the Pope Center for Higher Education Policy, there were 9.6 million students (almost 60 percent of all college students!) receiving Pell Grants in 2010. While some of those 9.6 million may not be eligible for Pell Grants under the new eligibility requirements, the number of those affected would be far, far fewer than all 9.6 million.
As far as whether Romney will “eliminate the tax deduction for college tuition,” it’s possible he will eliminate one specific tax deduction. The ad is referring to the American Opportunity Tax Credit for Higher Education, which is a tax credit of up to $2,500 for college costs. This was passed as part of the stimulus, and extended in 2010. Romney, to my knowledge, has not suggested he will push for yet another extension of the credit, and his campaign did not immediately respond to an e-mail about what his position was. According to Americans for Tax Reform, “many of its [the American Opportunity tax credit] recipients will receive in its place the Hope Scholarship credit, a nonrefundable credit with stricter income requirements that is worth up to $1,800 for two years of qualified educational expenses” in 2013, after the American Opportunity tax credit has expired.
Obama, once again, is trying to scare people into voting for him by pointing to potential government benefits they might lose under Romney. (Although his ad makers were careful enough to phrase it, “Romney’s plans could …” as opposed to “would.”) But college tuition costs are soaring (up by 559 percent since 1985!), and the more government benefits there are, the less likely it is that the college cost curve will bend.
UPDATE: In response to the ad, Romney campaign spokesperson Amanda Henneberg e-mails, “President Obama’s policies have only made the problems of college affordability and student debt worse. Under President Obama, the costs of college have skyrocketed – making it more difficult for students to attend college – and his economic policies have made it harder for graduates to get jobs. Mitt Romney will encourage innovation and competition to make college more affordable, and his economic policies will give recent graduates the job opportunities they deserve.”