RALEIGH Colleges that fail to meet affordability standards or do not serve poor students could lose federal financial aid dollars under a plan announced Friday by President Barack Obama.

In a speech at the University of Michigan, Obama detailed a sweeping strategy to contain the cost of college, which he said is rising faster than inflation and health care in the United States. For the first time, federal financial aid would be tied to tuition policies at individual campuses.

Obama said colleges are being put on notice that the government can't keep subsidizing skyrocketing tuition.

"You can't assume that you'll just jack up tuition every single year," he said. "If you can't stop tuition from going up, then the funding you get from taxpayers each year will go down. We should push colleges to do better. We should hold them accountable if they don't."

The president wants to expand loan funds by $10 billion annually, while steering the money to colleges that act responsibly to control costs.

The plan is likely to stir controversy. "That will be a hotly debated statement in higher education," said UNC-Chapel Hill Chancellor Holden Thorp, who was among a dozen education leaders to meet with Obama to discuss the cost issue in December. "But I think it's good for him to press on all those things because we do need to look really closely at everybody that's going to college and whether they're being served by the system."

Obama unveiled a multifaceted plan to tackle college costs. Among his proposals:

Incentives. He proposes a $1 billion Race to the Top competition, similar to his K-12 grant strategy, to reward states that adequately fund higher education and create standards for on-time degree completion. Another grant program, called "First in the World," would aim $55 million to colleges to boost productivity and enhance quality.

Transparency. The federal government will create a College Scorecard that helps students and families get data on price and student success indicators such as graduation and employment. Another tool, a financial aid "shopping sheet," will help families compare student aid packages.

Loan rates. The president called on Congress to prevent student loan interest rates from doubling this summer. (The rates are set to jump from 3.4 percent to 6.8 percent for Stafford subsidized loans).

Campus jobs. Obama also wants to double the number of work-study campus jobs available for needy students.

Some of Obama's proposals require congressional action. Given the political climate, that's not likely.

While some Republicans praised Obama's call for college accountability, others said more could be done. U.S. Rep. Virginia Foxx, a Banner Elk Republican, said any discussion about cost should include a review of federal regulations.

"Onerous regulations come with a price, and that price is often paid by students," said Foxx, who leads a House Subcommittee on Higher Education and Workforce Training. "As we take a look at the president's proposal, we hope he will give serious consideration to Republican efforts to rein in the regulatory burden facing higher education."

States must help

In a conference call with reporters, Obama policy advisers did not disclose how his initiatives would be paid for. The details will be released as part of the president's upcoming federal budget, they said.

Secretary of Education Arne Duncan said state legislatures have to pitch in, too. Last year, 40 states cut spending on higher education.

"States can't keep cutting higher education budgets and expect institutions to make up the differences by raising tuition each year," Duncan said. "We know that these state budget cuts have been perhaps the largest driver of tuition increases at public colleges over the past decade. At the same time, colleges and universities have to act with much greater urgency and creativity to contain costs, and they must hold themselves accountable for ensuring students get an education that really prepares them for success in the workplace."

North Carolina was one of those budget-cutting states, and the ensuing tuition debate is under way.

UNC campuses sustained a state budget equivalent to 15.6 percent across the university system last year. This week, UNC President Tom Ross proposed in-state undergraduate tuition and fee increases of 8.8 percent systemwide for the coming academic year.

That recommendation is smaller than the hikes proposed by seven of 16 campuses.

Fighting increases

The UNC Board of Governors will vote on tuition in February. But there is a growing chorus against increases at a time when many families are struggling to make ends meet. More than 20 former UNC system board members joined in a petition against the hikes. And this week, UNC-CH students held a screening of a documentary on student loan debt.

Eric Bost, a UNC-CH senior from Huntersville, said he'd like to see elected officials take a broader look at the tax structure and spending on defense and other categories. But in general, he praised Obama's plan. "We're certainly glad that he's making moves to hold colleges accountable," Bost said, "but at the same time there's still a lot that's not being done, that's not being talked about."

UNC-CH trustees have asked for an 11.4 percent tuition and fee increase for next year. Thorp said that although UNC-CH tuition has jumped in the past decade, student debt is actually lower. Thirty-five percent of UNC-CH students leave school with debt, and the average level is $15,500, compared to an inflation-adjusted figure of $18,000 in 2000, he said.

"That's something to be proud of," Thorp said.

At the December meeting, the chancellor reminded Obama that universities have to pay attention to costs, but also to quality. "We've got to maintain our ability to carry out the nation's research and our commitment to what he acknowledged is the greatest higher education system in the world," Thorp said, "and we've got to figure out how to balance all these things."