Obama visit to spotlight Iowa's high student debt

Doe, the aid commission spokeswoman, said the agency didn't expect more money from the state when lawmakers and Republican Gov. Terry Branstad reach a budget deal in coming days. Iowa spent about $245 per undergraduate on student grants in 2009-2010, far less than the national average of $627, according to the National Association of State Student Grant and Aid Programs. And unlike in many states, most of the grant money goes to students at private colleges.

Another key decision could come in June when the regents consider whether to continue allowing Iowa's three public universities to set aside some tuition, currently around 18 percent, for merit scholarships and grants to students with financial need. The practice of funding financial aid with tuition is common in higher education but has been in place in Iowa for only two years.

Some Republican lawmakers have attacked the policy in recent months as a redistribution of wealth that squeezes the middle class. In response, university leaders have pledged to start disclosing the policy on tuition bills. But some regents seem ready to pull back on the practice.

Mark Warner, director of financial aid at the University of Iowa, said he is "extremely concerned" about what that would mean for students. Warner sat on a state panel on student debt and believes a lack of state financial aid is the biggest factor.

"Having the president focus on student debt challenges is good," he said. "I think it's critically important the issue be front and center and at the highest level."