(US Department of Education/Flickr)

President Obama pushed for his education reform on August 22 to a crowd at the University at Buffalo in New York, which includes changing how funding is determined for schools.

"We want to rate them on who's offering the best value, so students and taxpayers get a bigger bang for their buck," Obama said in Buffalo. 

Obama says this puts more power in students' hands.

When a university demonstrates responsible pricing for its tuition and provides valuable resources such as career development opportunities, their students can get more aid, holding schools more accountable for their tuition. Students can also compare financial aid award letters to determine which school has the most value. 

Since 2008, the government increased the percentage of Pell Grant recipients by 50 percent, hoping it will shoulder some higher education costs.

But not everyone agrees on what effect Obama's education plan might have on a student's finances.

One argument — first proposed by former Secretary of Education William Bennett — says higher availability of student aid only incentivizes colleges to further raise tuition. If a student receives an additional $1,000 in Pell Grants, colleges could raise their tuition because the student appears to have more money to spend.

Obama's performance-based funding is part of his larger education plan that includes promoting innovation and competition and ensuring that student debt is affordable.

READ MORE: Obama's higher education reform plan.

Reach Tahsin here.