On Thursday, Obama unveiled his plan to drive down costs in higher education: Rating universities by affordability.

Well, not just affordability, even if that is supposed to play a huge part. The ratings would reflect a school's "value" — which would factor in tuition, graduation rates, the percentage of lower-income students in attendance, average student loan debt, and earnings after graduation.

Over the last 30 years, tuition costs have tripled, leaving the average student with $26,000 in debt and making reform of the university system a necessity.

"Higher education cannot be a luxury," Obama told an enthusiastic crowd of students at the University at Buffalo. "It's an economic imperative."

Eventually, if approved by Congress, federal financial aid would be tied to those ratings, the idea being to coax universities into reducing the cost of an education. The president wants to put his system in place by the beginning of the 2015 school year.

Why it might work
Right now, schools don't have much of an incentive to keep costs down, writes Slate's Matthew Yglesias:

Competition among schools is dominated by the quest to attract better applicants by spending money on other inputs. That means recruiting star faculty, building nicer dorms, spending financial aid money on students from prosperous families, and more. [Slate]

Take New York University. Next year, tuition plus room and board will hit $64,000, according to The Atlantic's Jake Flanagin, a recent NYU graduate, who claims the school's "track record for providing financial aid isn't great" even as it funds pricey expansions in New York City, Dubai, and Shanghai.

Currently, federal student aid is distributed to colleges based on how many students they enroll. To get a bigger piece of the federal pie, schools like NYU just have to attract more students. They don't have to worry about the mountain of debt those students could leave with — in some cases, without even graduating.

Another factor that drives up costs? Colleges, much like hospitals, don't have to worry about losing "customers," writes Ezra Klein at Bloomberg:

If Best Buy Co. wants to charge you too much for a television, you can walk out… When push comes to shove, producers need to meet the demands of consumers. But you can't walk out on medical care for your spouse or education for your child... In these markets, when push comes to shove, consumers meet the demands of producers.

The result, in both cases, is similar: skyrocketing costs for a product of uncertain quality. [Bloomberg]

Obama's plan would, ideally, create an incentive for schools to bring down their tuition costs and for students to pick the school that will get them employed without a lot of debt.

Why it might not work
"Defining the right quality metrics is difficult, and making sure you're not penalizing institutions that accept disadvantaged kids is crucial," writes Klein. "And that's before you even get into the politics."

Yes, the politics. At first, the plan would seem to have bipartisan appeal. Obama is not suggesting an increase in spending on student aid; he is suggesting a change in how that money is spent.

Wasting less money on education "sounds pretty conservative," writes New York columnist Jonathan Chait. "On the other hand, so did finding ways to get the government to spend less money on health care, a goal Republicans now deem a socialistic nightmare so terrifying they are mulling which catastrophic hostage threat they should use to destroy it."

Not only would Obama have to convince Congress to play ball, he would also have to contend with university administrators and alumni from some very powerful institutions. The University at Buffalo might be a good school and a great value, but it doesn't have as many influential, wealthy proponents as the Yales and Harvards of the world.

The battle over what "value" means will also be contentious. How do you rank earnings after graduation? Does that mean pumping out engineers will benefit your school more than producing liberal arts majors? Will schools turn away students they think won't graduate?

These are the questions Congress will have to answer, if lawmakers ever get around to taking up the issue.