Obama aims to refocus unemployment system

WASHINGTON – President Barack Obama wants unemployment insurance to become a stepping stone for future work by making it easier to enroll in school or job training. Whether he succeeds will depend on the willingness of states and colleges to change the rules.

People who have been laid off and want to go back to school often have to give up their monthly unemployment checks. And if they decide to return to school, they often don't qualify for federal aid because eligibility is based upon the previous year's income.

Under rule changes Obama outlined Friday, the Labor Department will ask states to make exceptions during economic downturns so that the unemployed can keep their benefits if they go to community college or pursue other education or training.

State governments, not Washington, decide who is eligible for unemployment, and they generally require anyone collecting assistance to be actively looking for work. That can complicate plans to attend school.

The Education Department, meanwhile, will encourage colleges to factor in the financial situation of an unemployed person applying for Pell Grants or other education and job training aid. Starting in July, the maximum Pell Grant, which helps low-income students afford college, will receive a $500 boost to $5,350.

Community colleges applauded the president's plan. George Boggs, president of the American Association of Community Colleges, said Obama would remove obstacles that keep the unemployed from heading back to school. The association represents about 1,200 such colleges.

"Sometimes we don't give our government credit for doing things that make sense," Boggs said. "It's great to see government stepping in and removing these disincentives."

However, one state-level critic accused Obama of avoiding the question of cost.

"Like so many of the president's initiatives, the answer for who pays the bill is state taxpayers and future generations," said South Carolina Gov. Mark Sanford, a Republican and one of Obama's sharpest critics on spending issues.

"No matter how well-intentioned this proposal is, we can't keep stacking debt on top of debt to deal with problems that were, in many cases, created by too much borrowing," Sanford said.

Mississippi Gov. Haley Barbour, a former Republican Party chairman, said his state already allows the unemployed to enroll in job training and encourages them to do so.

The federal government sets eligibility for Pell Grants, but colleges interpret the rules based on guidance from the Education Department. With proper instruction, Boggs said colleges would be willing to help the unemployed become eligible grant money.

Obama said it was time to change "senseless rules" that discourage displaced workers from getting needed education and training so they can find and perform the jobs of the future.

"The idea here is to fundamentally change our approach to unemployment in this country, so that it's no longer just a time to look for a new job, but is also a time to prepare yourself for a better job," Obama said.

"That's what our unemployment system should be — not just a safety net, but a stepping stone to a new future. It should offer folks educational opportunities they wouldn't otherwise have," the president said.

Obama commented shortly after the government reported that 539,000 more jobs were lost in April, pushing unemployment to 8.9 percent, the highest level since late 1983. Still, it was the smallest job loss in six months, as the pace of layoffs dropped from more than 600,000 in March.

Obama said it was "somewhat encouraging" that the monthly job-loss figure had fallen, but that "it's still a sobering toll." In order to exit the recession in a better position than before, "we have to make sure we have a work force that's trained better than before."

The president said he has asked his education and labor secretaries to encourage states and colleges to make the changes he called for, and to inform anyone collecting unemployment of the training programs and financial support available to them.

Both departments also have launched a new Web site, http://www.opportunity.gov, to help get the message out.

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Associated Press writer Beth Fouhy in New York contributed to this report.