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Faced with global competition and a weakening labor market, the White House is staking the nation's economic future on education. President Obama issued this call to arms in the early days of his administration: "We will prepare the next generation for success in college and the workforce, ensuring that American children lead the world once again in creativity and achievement."

The vision for U.S. education reform is twofold: improve the quality of K-12 schools and expand access to post-secondary education. Here's a look at what the current administration is doing to make these ideals a reality.

Education reform: Longstanding priorities, new funds

The administration states as a guiding principle the notion that "Our nation's economic competitiveness and the path to the American Dream depend on providing every child with an education that will enable them to succeed in a global economy that is predicated on knowledge and innovation." Access to a solid education from "cradle to career" will prepare the next generation to meet the challenges ahead.

In February 2009, Congress passed the $787 billion American Recovery and Reinvestment Act (ARRA), which sets aside $100 billion for education revitalization and reform. According to the White House, the legislation "invested heavily in education both as a way to provide jobs now and lay the foundation for long-term prosperity."

The U.S. Department of Education, led by Secretary of Education Arne Duncan, is partnering with local school districts, educators and education consultants nationwide to put ARRA funds to work improving education from preschool to college.

Education fundamentals: Preschool through high school

To fortify early childhood and K-12 education, the Obama administration has identified five priorities and mapped a series of policy initiatives to support them.

  1. Early education programs. The Recovery Act sets aside $5 billion for early childhood learning programs such as pre-K, Early Head Start, Head Start and special education.
  2. Standards and performance assessment. The U.S. K-12 school system falls short of standards set by top-performing countries. The Obama administration has pledged $15 billion to help states overhaul their standards, assess practices and analyze data. New standards will focus on preparing students for college and careers, with an emphasis on core skills such as critical thinking and problem solving.
  3. Teaching excellence. Included in the $77 billion elementary and secondary school reform bill are incentives to "recruit, retain and reward" successful teachers and improve classroom instruction.
  4. New directions. The Department of Education and the White House have backed experiments that could result in large-scale improvement in K-12 education. Entertained proposals include extending the school year to supporting successful charter schools.
  5. Accountability. Accountability has been a rallying cry in education reform since at least 2001, when the No Child Left Behind (NCLB) Act held schools accountable for student performance. The Obama administration calls on students and parents to share responsibility with educators. Schools are expected to articulate clear expectations to students and parents in the form of a school-family contract. Meanwhile, a reformed NCLB shifts the emphasis from punishment to improvement of struggling schools, with financial incentives to support program development.

ARRA-funded programs are already making an impact on early and secondary education. For example, the $4.35 billion "Race to the Top" competitive grant program is encouraging innovation in classroom instruction.

Going the distance: Higher education

President Obama has placed higher education policy in a larger context of social policy and global readiness. In his 2010 State of the Union address, he described a world-class education as "the best anti-poverty program around."

Improving higher education is the second pillar of the Obama administration's education policy. However, statistics indicate that there's still a large gap in higher education access and graduation rates.

The U.S. college graduation rate currently stands at 40 percent of the population, well behind the 55 percent rate in other industrialized countries such as South Korea, Canada and Russia. This shortfall is worrisome to policy makers because of the now universally recognized need to ready the next generation for a global marketplace. In a speech at University of Texas in Austin, President Obama warned that "the country that out-educates us today will out-compete us tomorrow."

A central objective of higher education policy reform is a 20 percent increase in college graduates over the coming decade. Secretary Duncan calls this goal "the North Star for all of our educational efforts."

Other administration efforts in higher education are aimed at shortening time to graduation, especially for minorities. While speaking at the University of Texas in Austin, President Obama observed recently, "Over a third of America's college students and over a half of our minority students don't earn a degree, even after six years. So we don't just need to open the doors of college to more Americans; we need to make sure they stick with it through graduation."

To achieve these goals, the Department of Education is bolstering financial aid programs, college completion programs and support for community colleges. The Recovery Act alone set aside $30 billion to promote college and vocational programs.

1. Financial aid reform

For most students, the biggest hurdle to achieving a post-secondary education is cost. Financial aid reform aims to put more tuition money in the hands of college and vocational students who qualify. The Health Care and Education Affordability Reconciliation Act of 2010 restructures and expands federal financial aid programs. Changes include:

  • The elimination of commercial banks from the federal student loan market, saving an estimated $68 billion in the coming decade
  • An expansion of the Pell Grant program, increasing grants to $5,350 for those who qualify and doubling the program's current funding
  • Increased access to federal PLUS loans for parents
  • More favorable terms for borrowers, including a cap on repayment levels to 10 percent of discretionary income and loan forgiveness after 20 years of timely payment
  • Student loan forgiveness for teachers, police officers and other public servants with at least 10 years of service

The Obama administration estimates that the amount student borrowers owe has risen almost 25 percent in the past five years--which indicates that successful financial aid reform now could significantly increase access to college or vocational training.

2. Support for career-focused higher education

Career-focused education--degree programs and coursework that teach job-relevant skills and are available to working adults--are another cornerstone of improving educational access. Community colleges, vocational training programs and for-profit schools are key institutions that play an important role in providing career-focused education.

To prepare students for success in emerging industries, the current administration is targeting career-focused programs in community colleges. The Education Reconciliation Act sets aside $2 billion for career training through the Community College and Career Training Grant Program.

In addition, a recently announced series of proposed regulations aimed at for-profit higher education institutions should change things in the industry. Weighing "gainful employment" and other graduate metrics, the new legislation serves to evaluate online schools based on their track record for producing successful graduates. At the press conference following the proposal of the new for-profit school rules, Secretary Duncan cited "the extraordinarily important work being done by the for-profit industry as a whole."

3. Degree completion programs

To support educational success of enrolled students, the Department of Education has set aside $10.6 billion to improve remedial education and graduation rates at community colleges. In addition, the administration has proposed a $3.5 billion College Access and Completion Fund.

This three-pronged approach to higher education policy aims to make college or vocational school a reality for more students.

An investment in America's future

The Obama administration brings a holistic approach to education policy, emphasizing access and quality at each stage of the education system. From early childhood programs to career training, the Department of Education aims to introduce a new era of accountability and educational options.

Although the full results are not likely to be seen immediately, the administration's serious educational investment promises to produce a new generation of graduates more capable of securing the nation's economic future.