Gutmann shares thoughts on Obama's free community college plan

Penn President Amy Gutmann is not yet sure how the Obama administration’s proposed community college plan will affect Penn, but she supports it.

Obama’s plan, which was unveiled on Jan. 8, would make community college free for students who attend at least half-time, maintain a minimum 2.5 GPA and are on track to complete their degrees. Though the plan is in its earliest stages of development, it has gained a lot of attention, particularly from leaders of higher education like Gutmann.

“The plan hasn’t been fully fleshed out, but anything that enables hardworking young people to get more and better education and get a college degree is a good thing in this country,” Gutmann said.

Gutmann, who faced financial hardship after her father died when she was in high school, is open about the role financial aid has played in her life. She is grateful for the full need-based scholarship she received from Radcliffe College at Harvard University and has since strongly advocated for need-based financial aid.

When asked if she was confident Penn was doing everything in its power to control tuition costs — now at $61,132 per academic year, including fees — Gutmann gave a firm yes.

“I am completely confident that we are doing not only everything we can, but more and more to control costs and to make Penn affordable,” she said. “And I am also confident that we will continue to work really hard at it. I will never say mission accomplished.”

While about 47 percent of students receive some form of financial aid — an average of $41,700 per recipient — Gutmann explained that even those students paying full tuition costs pay a subsidized price.

“We try to keep tuition and tuition increases as low as we can afford to keep them, and the full tuition, room and board is somewhere between 70 and 80 percent of the direct cost of a Penn education,” she said. “So as high as that sticker price is, even the sticker price is subsidized by our operating budget.”

Gutmann has made several media appearances to voice her support for increased access to community college. On Jan. 18, she appeared on CNBC’s “On the Money,” and on Jan. 23 she spoke to Fox Business Network’s Maria Bartiromo from the World Economic Forum in Davos alongside Harvard President Drew Gilpin Faust and Princeton President Christopher Eisgruber. All three administrators were supportive of Obama’s plan, but at the same time they were skeptical about the now-dropped proposal to tax 529 college savings plans.

Created by Congress in 1996, 529 plans encourage mainly middle class families to invest savings for higher education expenses. Earnings from the plans are not subject to federal taxes and are usually subject to reduced or no state taxes. The Obama administration had proposed ending the federal tax exemption in order to raise funds for the community college plan.

“We should be encouraging everybody to save right now for a college education and the 529 plan has been an important way of doing that,” Eisgruber told Bartiromo. “I don’t think we should be attacking these problems with mechanisms that divide the American people into classes ... Education is in the interest of everybody.”

After political backlash from both sides of the aisle, including House Minority Leader Nancy Pelosi, Obama dropped the tax plan — something Gutmann was pleased to see.

“I would like to think that by [my] being early in saying that this was a bad idea, the president decided to abandon it,” Gutmann joked. “I don’t claim credit for that, but I am on record early on before a lot of the critics, saying that I was not pleased with the idea.”

While it is not yet clear whether or not an institution like Penn would benefit directly from the Obama administration’s proposal, Gutmann believes the plan would “certainly add to the goals that are absolutely consistent with our goals as an institution of higher education.”

“We can’t educate everybody and we want to have good company, not only in the Ivy Plus group, but also in community colleges,” Gutmann said, adding that society would greatly benefit from having more students attend community college and set higher goals for themselves.

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