Fin 480 Real Estate Appraisal Exam 1 v1INSTRUCTIONSBefor.docx

Fin 480 | Real Estate Appraisal | Exam 1 v1
INSTRUCTIONS
Before the test:
1. This is a close-book, close-note test, work independently.
2. The CSUSB Academic Honesty Policy will be strictly
enforced.
At the start of the test:
1. This test contains 8 pages.
2. Before starting, please check your exam and verify if all the
pages are printed properly and are in order.
How to answer:
1. This test contains 40 questions.
2. Choose the BEST answer for each of the multiple choice
questions; there is only ONE best answer for each question.
3. Enter your answer for each question on the ANSWER
SHEET; note that ONLY the answer sheet will be graded, but
please turn in the entire packet.
After the test:
1. At the end of the test, please submit your exam to my through
email at [email protected]
2. Failing to do so will receive a zero on the exam.

Section1: Multiple choice questions (2.5 points each)
1. An appraisal can be described as a process to produce
A. A statement of value
B. A fixing of value
C. An estimate of value
D. None of the above
2. The value of an object means its
A. Fixed amount
B. Worth, utility or usefulness to someone for some purpose
C. Highest asking price
D. Value for any purpose
3. For appraisal purposes, market value generally may be
defined as
A. The most probable selling price
B. The amount of the loan commitment
C. The asking price
D. The highest offer
4. Informal appraisals include
A. Price comparisons made by consumers
B. The familiar "market analysis" made by sales agents
C. Value judgments based on intuition and experience
D. All of the above
5. As contrasted with informal appraisals, formal appraisals
A. Are always in writing
B. Are based primarily on supporting data
C. Depend primarily upon intuition
D. Cannot be easily reviewed
6. Which statement accurately describes a formal appraisal
report?
A. It may be either oral or written
B. It may vary in length from a short form or letter to a

detailed narrative
C. Its form and contents are governed by professional and
legal standards
D. All of the above are true
7. Which of the following statements about the government
survey system is false?
A. A township is 36 sections
B. A section is 640 acres
C. A section measures one square mile
D. All sections are the same exact size
8. To be valid, a contract must
A. Include an offer, an acceptance, and consideration
B. Involve competent parties, an act to be performed, legal
consideration, a mutual agreement, and the mutuality of
obligation
C. Both a. and b.
D. Comply with the Statute of Frauds
9. The bundle of rights includes
A. The right to occupy, exclude others, or to sell
B. The right to borrow against
C. The right to convey by inheritance
D. All of the above
10. When title to property reverts to the state because the
owners left no will or heirs, it is because of the government’s
right of
A. Police power
B. Eminent domain
C. Taxation
D. Escheat

11. Air pollution regulations are based on the governmental
authority called
A. Police power
B. Eminent domain
C. Taxation
D. Escheat
12. The appraisal process involves four steps, the first of which
is to
A. Choose an appropriate value approach
B. Define the appraisal problem
C. View the property
13. Which of the following is not an important consideration
with regard to the definition of market value?
A. Motives of buyer and seller
B. Informed parties
C. A good location
D. Terms of the sale
14. Which approach to value is considered to be the most direct
and reflective of market actions?
A. The sales comparison approach
B. The cost approach
C. The income approach
D. None of these
15. The economic base of a town depends upon
A. Its local services
B. The type of function it serves
C. Its export production
D. Its land-use pattern

16. The land use patterns of a community will often be
determined by
A. The town's origin
B. The topography
C. The transportation systems in use
D. All of the above
17. Which of the following is not a characteristic of a perfect
market?
A. Large numbers of buyers and sellers
B. Products are similar and interchangeable
C. Government plays a large role
D. Items are small and inexpensive
18. Appraisers study real estate markets in order to
A. Identify changing price levels
B. Evaluate market reaction to property differences
C. Evaluate the strength of various economic forces
D. All of the above
19. When supply and demand are in balance, value is
theoretically equal to
A. The original asking price
B. The cost of reproduction, including profit
C. The appraised needed for a loan
D. Value in use
20. Which of the four agents of production is said to be entitled
to the “surplus” of productivity?
A. Labor
B. Capital
C. Land
D. Coordination or management
21. If there are no comparable sales available, which method

can be used to appraise vacant commercial land?
A. The market method
B. The allocation method
C. The land residual method
22. When a jurisdiction concludes that environmental impact
reports are required on any new development in an area, the
likely immediate result is that
A. Developed properties suffer
B. Vacant land values increase
C. Vacant land values decrease
23. The main physical unit(s) of comparison in the analysis of
vacant land are
A. Price per square foot, front foot, or acre
B. Terms of sale, time, location, and physical characteristics
C. Price, topography, view
D. Price per room
24. Cost estimates used in appraisal relate to
A. Typical costs
B. Wholesale costs
C. Actual costs to owner
D. Cost of materials plus labor
25. Which of these is the best definition of appraisal:
A. A scientific calculation of property
B. The process of mathematically measuring value
C. Investigation and measurement of financial parameters
D. The act or process of developing an opinion of value

26. The power of government to regulate for the public health,
safety, and welfare is known as:
A. the police power
B. the power of eminent domain
C. states’ rights
D. sovereignty
27. An item that is not part of the real estate is considered to
be:
A. a fixture
B. an appurtenance
C. an improvement
D. personal property
28. Smith and Jones are neighbors. There is an easement across
Jones’ property to provide access to Smith’s parcel. If Jones
sells his property to Brown, Smith:
A. must negotiate a new easement agreement with Brown
B. may continue to use the easement without interruption,
regardless of the sale
C. may continue to use the easement unless Brown objects
D. must notify Brown of the existence of the easement
29. Which of the following is not one of the four factors of
value:
A. utility
B. scarcity
C. desire
D. cost
30. An example of a social force that could affect real estate
values is:
A. wage levels
B. population shifts

C. climate
D. unemployment
31. According to the principle of supply and demand, prices
will tend to increase when:
A. supply exceeds demand
B. demand exceeds supply
C. supply and demand are in balance
D. competition increases
32. In defining an appraisal problem, it is important to identify:
A. the use of the appraisal
B. the purpose of the appraisal
C. the scope of work
D. All of the above
33. Which of the following types of depreciation is almost
always incurable?
A. Physical deterioration
B. Functional obsolescence
C. External obsolescence
34. Worn-out carpeting in a house would most likely fall into
the category of:
A. curable physical deterioration
B. incurable physical deterioration
C. curable functional obsolescence
D. incurable functional obsolescence
35. In the cost approach to value, the value of the land or site
is:

A. ignored
B. estimated separately
C. adjusted on the basis of reproduction cost
D. based on unit cost
36. The effective age of an improvement:
A. depends on the actual age of the improvement
B. is the difference between actual age and economic life
C. is the difference between actual age and remaining
economic life
D. is the difference between economic life and remaining
economic life
37. Depreciation may be measured by the:
A. breakdown method
B. economic age-life method
C. market extraction (sales-data) method
D. any of the above
38. An estimate of replacement cost would include the cost of
all of the following except:
A. entrepreneurial profit
B. super-adequacies in the subject property design
C. construction loan interest
D. property taxes during the construction period
39. If construction costs are 10% higher in the local market than
the average costs listed in a cost manual, the appraiser should
adjust the unit costs used in the cost estimate by:
A. multiplying them by 10%
B. multiplying them by 110%

C. multiplying them by 90%
D. dividing them by 10%
40. A 20-year-old building is estimated to have a total economic
life of 50 years. How much is the value loss?
A. 50%
B. 40%
C. 80%
D. 4/7
ANSWER SHEET 1
Last Name: _______________________First Name:
_________________________Student ID:
_________________________
Multiple choice questions (2.5 points each); (Enter your answer
below, A, B, C, D, or E)
M01
M11
M21
M31
M41
M02
M12
M22

M32
M42
M03
M13
M23
M33
M43
M04
M14
M24
M34
M44
M05
M15
M25
M35
M45
M06

M16
M26
M36
M46
M07
M17
M27
M37
M47
M08
M18
M28
M38
M48
M09
M19
M29
M39

Page PAGE 8 of NUMPAGES 8
Letter III
Letters from an American Farmer (1782)
J. Hector St. John Crevecoeur
Exerpt from LETTER III.
WHAT IS AN AMERICAN.
I WISH I could be acquainted with the feelings and thoughts
which must agitate the heart and present
themselves to the mind of an enlightened Englishman, when he
first lands on this continent. He must greatly
rejoice that he lived at a time to see this fair country discovered
and settled; he must necessarily feel a share
of national pride, when he views the chain of settlements which
embellishes these extended shores. When he
says to himself, this is the work of my countrymen, who, when
convulsed by factions, afflicted by a variety
of miseries and wants, restless and impatient, took refuge here.
They brought along with them their national
genius, to which they principally owe what liberty they enjoy,
and what substance they possess. Here he
sees the industry of his native country displayed in a new
manner, and traces in their works the embrios of

all the arts, sciences, and ingenuity which flourish in Europe.
Here he beholds fair cities, substantial villages,
extensive fields, an immense country filled with decent houses,
good roads, orchards, meadows, and
bridges, where an hundred years ago all was wild, woody and
uncultivated! What a train of pleasing ideas
this fair spectacle must suggest; it is a prospect which must
inspire a good citizen with the most heartfelt
pleasure. The difficulty consists in the manner of viewing so
extensive a scene. He is arrived on a new
continent; a modern society offers itself to his contemptation,
different from what he had hitherto seen. It is
not composed, as in Europe, of great lords who possess every
thing and of a herd of people who have
nothing. Here are no aristocratical families, no courts, no kings,
no bishops, no ecclesiastical dominion, no
invisible power giving to a few a very visible one; no great
manufacturers employing thousands, no great
refinements of luxury. The rich and the poor are not so far
removed from each other as they are in Europe.
Some few towns excepted, we are all tillers of the earth, from
Nova Scotia to West Florida. We are a
people of cultivators, scattered over an immense territory
communicating with each other by means of good
roads and navigable rivers, united by the silken bands of mild
government, all respecting the laws, without
dreading their power, because they are equitable. We are all
animated with the spirit of an industry which is
unfettered and unrestrained, because each person works for
himself. If he travels through our rural districts
he views not the hostile castle, and the haughty mansion,
contrasted with the clay-built hut and miserable
cabbin, where cattle and men help to keep each other warm, and
dwell in meanness, smoke, and indigence.
A pleasing uniformity of decent competence appears throughout
our habitations. The meanest of our

log-houses is a dry and comfortable habitation. Lawyer or
merchant are the fairest titles our towns afford;
that of a farmer is the only appellation of the rural inhabitants
of our country. It must take some time ere he
can reconcile himself to our dictionary, which is but short in
words of dignity, and names of honour. (There,
on a Sunday, he sees a congregation of respectable farmers and
their wives, all clad in neat homespun, well
mounted, or riding in their own humble waggons. There is not
among them an esquire, saving the unlettered
magistrate. There he sees a parson as simple as his flock, a
farmer who does not riot on the labour of
others. We have no princes, for whom we toil, starve, and bleed:
we are the most perfect society now
Page 1
Letter III
existing in the world. Here man is free; as he ought to be; nor is
this pleasing equality so transitory as many
others are. Many ages will not see the shores of our great lakes
replenished with inland nations, nor the
unknown bounds of North America entirely peopled. Who can
tell how far it extends? Who can tell the
millions of men whom it will feed and contain? for no European
foot has as yet travelled half the extent of
this mighty continent!
The next wish of this traveller will be to know whence came all
these people? they are mixture of English,
Scotch, Irish, French, Dutch, Germans, and Swedes. From this
promiscuous breed, that race now called
Americans have arisen. The eastern provinces must indeed be

excepted, as being the unmixed descendants
of Englishmen. I have heard many wish that they had been more
intermixed also: for my part, I am no
wisher, and think it much better as it has happened. They
exhibit a most conspicuous figure in this great and
variegated picture; they too enter for a great share in the
pleasing perspective displayed in these thirteen
provinces. I know it is fashionable to reflect on them, but I
respect them for what they have done; for the
accuracy and wisdom with which they have settled their
territory; for the decency of their manners; for their
early love of letters; their ancient college, the first in this
hemisphere; for their industry; which to me who am
but a farmer, is the criterion of everything. There never was a
people, situated as they are, who with so
ungrateful a soil have done more in so short a time. Do you
think that the monarchical ingredients which are
more prevalent in other governments, have purged them from all
foul stains? Their histories assert the
contrary.
In this great American asylum, the poor of Europe have by some
means met together, and in consequence
of various causes; to what purpose should they ask one another
what countrymen they are? Alas, two thirds
of them had no country. Can a wretch who wanders about, who
works and starves, whose life is a continual
scene of sore affliction or pinching penury; can that man call
England or any other kingdom his country? A
country that had no bread for him, whose fields procured him no
harvest, who met with nothing but the
frowns of the rich, the severity of the laws, with jails and
punishments; who owned not a single foot of the
extensive surface of this planet? No! urged by a variety of
motives, here they came. Every thing has tended
to regenerate them; new laws, a new mode of living, a new

social system; here they are become men: in
Europe they were as so many useless plants, wanting vegitative
mould, and refreshing showers; they
withered, and were mowed down by want, hunger, and war; but
now by the power of transplantation, like
all other plants they have taken root and flourished! Formerly
they were not numbered in any civil lists of
their country, except in those of the poor; here they rank as
citizens. By what invisible power has this
surprising metamorphosis been performed? By that of the laws
and that of their industry. The laws, the
indulgent laws, protect them as they arrive, stamping on them
the symbol of adoption; they receive ample
rewards for their labours; these accumulated rewards procure
them lands; those lands confer on them the
title of freemen, and to that title every benefit is affixed which
men can possibly require. This is the great
operation daily performed by our laws. From whence proceed
these laws? From our government. Whence
the government? It is derived from the original genius and
strong desire of the people ratified and confirmed
by the crown. This is the great chain which links us all, this is
the picture which every province exhibits,
Nova Scotia excepted. There the crown has done all; either
there were no people who had genius, or it was
not much attended to: the consequence is, that the province is
very thinly inhabited indeed; the power of the
crown in conjunction with the musketos has prevented men from
settling there. Yet some parts of it
flourished once, and it contained a mild harmless set of people.
But for the fault of a few leaders, the whole
were banished. The greatest political error the crown ever
committed in America, was to cut off men from a
Page 2

Letter III
country which wanted nothing but men!
What attachment can a poor European emigrant have for a
country where he had nothing? The knowledge
of the language, the love of a few kindred as poor as himself,
were the only cords that tied him: his country
is now that which gives him land, bread, protection, and
consequence: Ubi panis ibi patria, is the motto of
all emigrants. What then is the American, this new man? He is
either an European, or the descendant of an
European, hence that strange mixture of blood, which you will
find in no other country. I could point out to
you a family whose grandfather was an Englishman, whose wife
was Dutch, whose son married a French
woman, and whose present four sons have now four wives of
different nations. He is an American, who
leaving behind him all his ancient prejudices and manners,
receives new ones from the new mode of life he
has embraced, the new government he obeys, and the new rank
he holds. He becomes an American by
being received in the broad lap of our great Alma Mater. Here
individuals of all nations are melted into a
new race of men, whose labours and posterity will one day
cause great changes in the world. Americans are
the western pilgrims, who are carrying along with them that
great mass of arts, sciences, vigour, and industry
which began long since in the east; they will finish the great
circle. The Americans were once scattered all
over Europe; here they are incorporated into one of the finest
systems of population which has ever
appeared, and which will hereafter become distinct by the power
of the different climates they inhabit. The

American ought therefore to love this country much better than
that wherein either he or his forefathers were
born. Here the rewards of his industry follow with equal steps
the progress of his labour; his labour is
founded on the basis of nature, self-interest; can it want a
stronger allurement? Wives and children, who
before in vain demanded of him a morsel of bread, now, fat and
frolicsome, gladly help their father to clear
those fields whence exuberant crops are to arise to feed and to
clothe them all; without any part being
claimed, either by a despotic prince, a rich abbot, or a mighty
lord. I lord religion demands but little of him;
a small voluntary salary to the minister, and gratitude to God;
can he refuse these? The American is a new
man, who acts upon new principles; he must therefore entertain
new ideas, and form new opinions. From
involuntary idleness, servile dependence, penury, and useless
labour, he has passed to toils of a very
different nature, rewarded by ample subsistence. --This is an
American.
............................................................................
Exclusive of those general characteristics, each province has its
own, founded on the government, climate,
mode of husbandry, customs, and peculiarity of circumstances.
Europeans submit insensibly to these great
powers, and become, in the course of a few generations, not
only Americans in general, but either
Pennsylvanians, Virginians, or provincials under some other
name. Whoever traverses the continent must
easily observe those strong differences, which will grow more
evident in time. The inhabitants of Canada,
Massachusetts, the middle provinces, the southern ones will be
as different as their climates; their only points
of unity will be those of religion and language.

As I have endeavoured to shew you how Europeans become
Americans; it may not be disagreeable to
shew you likewise how the various Christian sects introduced,
wear out, and how religious indifference
becomes prevalent. When any considerable number of a
particular sect happen to dwell contiguous to each
other, they immediately erect a temple, and there worship the
Divinity agreeably to their own peculiar ideas.
Nobody disturbs them. If any new sect springs up in Europe, it
may happen that many of its professors will
come and settle in America. As they bring their zeal with them,
they are at liberty to make proselytes if they
Page 3
Letter III
can, and to build a meeting and to follow the dictates of their
consciences; for neither the government nor
any other power interferes. If they are peaceable subjects, and
are industrious, what is it to their neighbours
how and in what manner they think fit to address their prayers
to the Supreme Being? But if the sectaries are
not settled close together, if they are mixed with other
denominations, their zeal will cool for want of fuel,
and will be extinguished in a little time. Then the Americans
become as to religion, what they are as to
country, allied to all. In them the name of Englishman,
Frenchman, and European is lost, and in like manner,
the strict modes of Christianity as practised in Europe are lost
also. This effect will extend itself still farther
hereafter, and though this may appear to you as a strange idea,
yet it is a very true one. I shall be able

perhaps hereafter to explain myself better, in the meanwhile, let
the following example serve as my first
justification.
Let us suppose you and I to be travelling; we observe that in
this house, to the right, lives a Catholic, who
prays to God as he has been taught, and believes in
transubstantion; he works and raises wheat, he has a
large family of children, all hale and robust; his belief, his
prayers offend nobody. About one mile farther on
the same road, his next neighbour may be a good honest
plodding German Lutheran, who addresses himself
to the same God, the God of all, agreeably to the modes he has
been educated in, and believes in
consubstantiation; by so doing he scandalizes nobody; he also
works in his fields, embellishes the earth,
clears swamps, &c. What has the world to do with his Lutheran
principles? He persecutes nobody, and
nobody persecutes him, he visits his neighbours, and his
neighbours visit him. Next to him lives a seceder,
the most enthusiastic of all sectaries; his zeal is hot and fiery,
but separated as he is from others of the same
complexion, he has no congregation of his own to resort to,
where he might cabal and mingle religious pride
with worldly obstinacy. He likewise raises good crops, his
house is handsomely painted, his orchard is one
of the fairest in the neighbourhood. How does it concern the
welfare of the country, or of the province at
large, what this man's religious sentiments are, or really
whether he has any at all? He is a good farmer, he is
a sober, peaceable, good citizen: William Penn himself would
not wish for more. This is the visible
character, the invisible one is only guessed at, and is nobody's
business. Next again lives a Low Dutchman,
who implicitly believes the rules laid down by the synod of
Dort. He conceives no other idea of a clergyman

than that of an hired man; if he does his work well he will pay
him the stipulated sum; if not he will dismiss
him, and do without his sermons, and let his church be shut up
for years. But notwithstanding this coarse
idea, you will find his house and farm to be the neatest in all
the country; and you will judge by his waggon
and fat horses, that he thinks more of the affairs of this world
than of those of the next. He is sober and
laborious, therefore he is all he ought to be as to the affairs of
this life; as for those of the next, he must trust
to the great Creator. Each of these people instruct their children
as well as they can, but these instructions
are feeble compared to those which are given to the youth of the
poorest class in Europe. Their children will
therefore grow up less zealous and more indifferent in matters
of religion than their parents. The foolish
vanity, or rather the fury of making Proselytes, is unknown
here; they have no time. the seasons call for all
their attention, and thus in a few years, this mixed
neighbourhood will exhibit a strange religious medley, that
will be neither pure Catholicism nor pure Calvinism. A very
perceptible indifference even in the first
generation, will become apparent; and it may happen that the
daughter of the Catholic will marry the son of
the seceder, and settle by themselves at a distance from their
parents. What religious education will they give
their children? A very imperfect one. If there happens to be in
the neighbourhood any place of worship, we
will suppose a Quaker's meeting; rather than not shew their fine
clothes, they will go to it, and some of them
may perhaps attach themselves to that society. Others will
remain in a perfect state of indifference; the
children of these zealous parents will not be able to tell what
their religious principles are, and their
Page 4

Letter III
grandchildren still less. The neighborhood of a place of worship
generally leads them to it, and the action of
going thither, is the strongest evidence they can give of their
attachment to any sect. The Quakers are the
only people who retain a fondness for their own mode of
worship; for be they ever so far separated from
each other, they hold a sort of communion with the society, and
seldom depart from its rules, at least in this
country.
Thus all sects are mixed as well as all nations; thus religious
indifference is imperceptibly disseminated from
one end of the continent to the other; which is at present one of
the strongest characteristics of the
Americans. Where this will reach no one can tell, perhaps it
may leave a vacuum fit to receive other
systems. Persecution, religious pride, the love of contradiction,
are the food of what the world commonly
calls religion. These motives have ceased here: zeal in Europe is
confined; here it evaporates in the great
distance it has to travel; there it is a grain of powder inclosed,
here it burns away in the open air, and
consumes without effect.
Page 5
Paid for by Obama for America

BARACK OBAMA’S PLAN TO RECLAIM THE AMERICAN
DREAM
The American dream is increasingly out of reach for many
people. Americans with incomes below
$100,000 have experienced stagnating wages, declining health
care coverage, erosion of pension
protections, rising personal debt, jobs disappearing as a result
of global competition and rising housing
costs. Further, the gap between America’s richest and poorest
is at its widest points in at least 25
years. At a time when costs are rising and Americans are
working harder just to keep up, Barack
Obama will provide relief for the middle class and support for
working people. In addition to his health
care and tax relief plans, Obama will make college affordable,
reform our bankruptcy and credit card
laws, protect the balance between work and family, and put a
secure and dignified retirement within
the reach of all Americans. Obama has been a strong advocate
for working people throughout his
public life, and he will stand up to special interests and bring
America together to reclaim the
American dream.
Barack Obama’s Agenda to Reclaim the American Dream

Provide middle class tax cuts of up to $1,000 for working
families.
Address the challenge of balancing work and family by
guaranteeing workers paid
sick days, expanding Family and Medical Leave Act (FMLA),
supporting paid
FMLA, and doubling after-school programs.
Help Americans buy and keep their homes.
Protect American families by reforming bankruptcy laws,
predatory credit card
policies, and abusive payday lending practices.
Reduce health care costs by $2,500 for a typical family.
Strengthen retirement security by automatically enrolling
workers in portable
retirement accounts and providing additional incentives for
Americans to save.
Put the cost of college in reach for by providing a $4,000
refundable tax credit
available at the time of enrollment.

I. TAX FAIRNESS
For decades, gaps in wealth have grown, while the costs to
working people have increased. The Bush
Administration’s tax policies have made the problem worse:
this year alone, the average person in the
wealthiest 1 percent of Americans will receive more than
$55,000 from the Bush tax cuts, while the
average person in the bottom 20 percent of Americans will get
about $70. And while corporations can
hire expensive lobbyists to change something they don’t like in
the tax code, working Americans don’t
have that same luxury. Barack Obama’s tax fairness proposal
puts the interests of the middle class
first.
Making Work Pay for Working Families
The Obama plan will give working families immediate and
direct relief – every middle class working
American will receive a $500 “Making Work Pay” tax credit
that will fully offset the first $500 of
payroll tax they pay, or $1,000 per working family. This
refundable tax credit will benefit 150 million
working Americans and their families. Ten million working
Americans will no longer have to pay any
income taxes as a result of this plan. Millions of small business
owners who have to pay both the
employer and employee portions of the payroll tax, will benefit
from this reduction of the self-
employment tax. For those low and middle-income seniors who
are retired and are not eligible for this
workers’ credit, the Obama plan will provide direct tax relief by

eliminating all income taxes for
seniors who make under $50,000 per year.
Simplify Tax Filings for Middle Class Americans
The Obama tax fairness plan will also reduce taxpayers’
headaches and payments during tax season by
simplifying tax filings so middle class Americans can complete
their taxes on their own in 5 minutes or
less. Experts estimate that this innovative proposal will save
middle class Americans up to 200 million
total hours of work and aggravation and up to $2 billion in tax
preparer fees.
II. WORK-FAMILY BALANCE
American workers expect that achieving the American Dream
will take hard work. But they do not
expect that it will require them to abandon their children and
aging parents in times of need. As larger
percentages of women have entered the workforce, working
hours have grown longer, and workers
find themselves caring for their aging and infirm parents, family
caregiving has been stressed and
stretched. Most American workers cannot adjust their work
schedules to handle a family emergency
without the risk of losing their jobs or take a day off to care for
a sick or newborn child without the risk
of losing pay or vacation days. As president, Barack Obama
will ensure that our government’s policies
match the reality of our working lives.
Expand High-Quality Afterschool Opportunities
Expanding access to high-quality afterschool programs will help
children learn and strengthen a broad
range of skills and provide relief to working parents who have
to juggle child care and work

responsibilities. Barack Obama will double funding for the
main federal support for afterschool
programs, the 21st Century Learning Centers program, to serve
one million more children. Obama
will include measures to maximize performance and
effectiveness across grantees nationwide.
Expand the Child and Dependent Care Tax Credit
The Child and Dependent Care Tax Credit provides too little
relief to families that struggle to afford
child care expenses. Currently the credit only covers up to 35
percent of the first $3,000 of child care
expenses a family incurs for one child and the first $6,000 for a
family with two or more children. And
the credit is not refundable, which means that upper-income
families disproportionately benefit while
families who make under $50,000 a year receive less than a
third of the tax credit. Barack Obama will
reform the Child and Dependent Care Tax Credit by making it
refundable and allowing low-income
families to receive up to a 50 percent credit for their child care
expenses. Coupled with Obama’s
“Making Work Pay” tax credit, this proposal will help put more
money directly in the pockets of
hardworking low and middle-income parents.
Expand the Family and Medical Leave Act (FMLA)
The FMLA covers only certain employees of employers with 50
or more employees. As a result, only
about half of American workers are eligible for leave under the

FMLA. Barack Obama will expand
the FMLA to cover businesses with 25 or more employees.
Barack Obama will expand the FMLA to cover more purposes as
well. He will:
• Allow workers to take leave for elder care needs.
• Allow parents up to 24 hours of leave each year to participate
in their children’s academic
activities at school. Many states, including California, Illinois,
Massachusetts, Minnesota,
Nevada, North Carolina, Rhode Island, Vermont, and the
District of Columbia, have enacted
laws that allow parents to take time off to participate in
designated school-related functions.
• Allow leave to be taken for purposes of caring for individuals
who reside in their home for 6
months or more.
• Expand FMLA to cover leave for employees to address
domestic violence and sexual assault
against themselves, their children, or their parents.
Encourage States to Adopt Paid Leave
According to the National Partnership for Women and Families,
78 percent of employees covered by
the FMLA who have needed leave but have not taken it report
that it is because they could not afford
to take unpaid leave. Of those employees who could not afford
leave, nearly 88 percent report that
they would have taken leave if they had been able to receive
some pay while away from work.

Furthermore, access to paid leave is correlated with income and
education, with low-income families
least likely to have the resources or savings to compensate for
time off. The states have begun to
respond. California, for example, has recently initiated paid
leave through its disability insurance fund,
thereby making sure that the costs aren’t borne by employers
alone. As president, Barack Obama will
initiate a 50 state strategy to encourage all of the states to adopt
paid-leave systems. Obama will
provide a $1.5 billion fund to assist states with start-up costs
and to help states offset the costs for
employees and employers. Obama’s Department of Labor will
also provide technical information to
the states on how to craft paid-leave programs consistent with
their local needs.
Paid Sick Days
Half of all private sector workers have no paid sick days and the
problem is worse for employees in
low-paying jobs, where less than a quarter receive any paid sick
days. Barack Obama will require that
employers provide seven paid sick days per year.
Protect Against Caregiver Discrimination
Workers with family obligations often are discriminated against
in the workplace. This is a growing
problem, as evidenced by the skyrocketing number of
discrimination suits being filed: there has been a
400 percent increase in the number of family responsibility
discrimination lawsuits in the last decade.
Obama will prevent parents from being discriminated against
because of caregiving responsibilities.
Barack Obama will commit the government to enforcing
recently-enacted Equal Employment
Opportunity Commission guidelines on caregiver

discrimination.
Expand Flexible Work Arrangements
Working parents often have to juggle not only child care
responsibilities, but also care responsibilities
for elderly relatives. Barack Obama will address this concern
by creating a program to inform
businesses about the benefits of flexible work schedules for
productivity and establishing positive
workplaces; helping businesses create flexible work
opportunities; and increasing federal incentives
for telecommuting. Obama will also make the federal
government a model employer in terms of
adopting flexible work schedules and permitting employees to
petition to request flexible
arrangements. This program has achieved great success in
Great Britain, and Obama will replicate it
throughout the federal government.
III. HOUSING
Owning a home is the cornerstone of the American Dream, yet
today, too many working families are
finding it just out of reach. The implosion of the subprime
lending industry threatens to bring
foreclosure to over two million households, including many
families with children. And some
estimates have reported that homeowners may lose upwards of
$164 billion, primarily from lost home

equity.
Mandate Accurate Loan Disclosure
Today’s subprime mortgage problem stems in large part from
the lack of easy-to-understand
information that borrowers receive from mortgage brokers. As
president, Barack Obama will enact
laws to ensure that all prospective homebuyers have access to
accurate and complete information about
their mortgage options. Obama will create a Homeowner
Obligation Made Explicit (HOME) score,
which will provide potential borrowers with a simplified,
standardized borrower metric (similar to the
Annual Percentage Rate (APR) the effective interest rate that
the borrower will pay on a loan) for
home mortgages. The HOME score will allow individuals to
easily compare various mortgage
products and understand the full cost of the loan. The HOME
score would also help borrowers
understand their long-term obligations and would be required to
include mandatory taxes and
insurance.
Create Fund to Help Homeowners Avoid Foreclosures
In addition to taking important steps to prevent mortgage fraud
from occurring in the future, Barack
Obama will establish policies to help Americans currently
facing foreclosure through no fault of their
own. For instance, in communities where there are many
foreclosures, the property values of other
homeowners are often also negatively impacted, destroying
equity and wealth even for the
homeowners who are managing to make their mortgage
payments. Obama will create a fund to help
people refinance their mortgages and provide comprehensive
supports to innocent homeowners. The

fund will also assist individuals who purchased homes that are
simply too expensive for their income
levels by helping to sell their homes. The fund will help offset
costs of selling a home, including
helping low-income borrowers get additional time and support
to pay back any losses from the sale of
their home and waiving certain federal, state and local income
taxes that result from an individual
selling their home to avoid foreclosure. The fund will be
partially paid for by Obama’s increased
penalties on lenders who act irresponsibly and commit fraud.
Combat Mortgage Fraud and Subprime Loans
Barack Obama introduced comprehensive legislation over a year
ago to fight mortgage fraud and
protect consumers against abusive lending practices. Obama’s
STOP FRAUD Act:
• Provides the first federal definition of mortgage fraud.
• Increases funding for federal and state law enforcement
programs.
• Creates new criminal penalties for mortgage professionals
found guilty of fraud.
• Requires industry insiders to report suspicious activity.
• Provides counseling to homeowners and tenants to avoid
foreclosures.
• Gives borrowers additional rights to protect themselves during
foreclosure proceedings.
• Requires the Government Accountability Office to evaluate
and report to Congress on various

state lending practices so that state regulations that undermine
consumer’s rights can be
identified and hopefully eliminated.
Provide a New Mortgage Interest Tax Credit
The Obama plan will also provide more Americans with the
financial assistance they need to invest in
purchasing their own home. Currently, many middle class
Americans do not get the existing mortgage
interest tax deduction because they do not itemize their taxes.
As a result, primarily wealthy
Americans benefit from this homeownership tax incentive.
Obama will ensure that middle class
Americans finally get the financial assistance they need to
purchase their own home by creating a 10
percent universal mortgage credit that give tax relief to
Americans who have a home mortgage. The
Obama proposal will provide 10 million homeowners, most of
whom earn under $50,000 per year with
an average of $500 in savings.
IV. PROTECT FAMILIES BY REFORMING BANKRUPTCY &
CREDIT CARD LAWS
Reform Corporate Bankruptcy Laws to Protect Workers
Workers risk losing everything when their company goes
bankrupt. Too many employees have
worked hard, played by the rules and contributed to private
pensions only to find themselves left in the
lurch when their companies went bankrupt.
Current bankruptcy laws are designed to protect banks before
workers by helping companies get
capital to get back on their feet, but in so doing it has made it

easier for bankrupt companies to shed
pension and health care obligations to retired workers.
Barack Obama has supported efforts to force firms to put more
money into their pension funds and
make them solvent so workers aren’t left with a bunch of
worthless IOU’s after thirty years of service.
As president, Obama will:
• Put promises to workers higher on the list of debts that
companies cannot shed.
• Ensure that the bankruptcy courts do not allow companies to
demand more sacrifice from
workers than from executives when companies fall on hard
times.
• Protect the jobs and benefits of workers and retirees when
corporations file for bankruptcy by
telling companies that they cannot issue bonuses for executives
during bankruptcy while their
workers watch their pensions disappear.
• Increase the amount of unpaid wages and benefits workers can
claim in bankruptcy court
against their employer.
• Limit the circumstances under which retiree benefits can be
reduced.
Reform Bankruptcy Laws to Protect Families Facing a Medical
Crisis
More than half of all personal bankruptcies today are caused by
medical bills. Barack Obama will
protect workers who fall into personal bankruptcy as a result of

a medical crisis. Current law, which
Obama opposed in the 2005 bankruptcy bill, provides too many
families with inadequate relief when
faced by an unforeseen medical crisis. Obama will create an
exemption from the new law's
requirement that middle class families extend their debts rather
than have them forgiven. If a person
can demonstrate to the satisfaction of the bankruptcy court that
the reason they filed for
bankruptcy was a result of debts incurred through medical
expenses, then Obama believes they should
be relieved of that debt through a process that lets them get
back on their feet.
Close Bankruptcy Loophole for Mortgage Companies
The 2005 bankruptcy bill, which Barack Obama opposed, is
expected to have serious effects on low
and middle-income borrowers of subprime mortgages. While
investors who own multiple homes and
people with vacation homes can renegotiate those mortgages in
bankruptcy, current Chapter 13 law
requires ordinary families to stick with the original terms of
their home loans—regardless of whether
the loan was predatory or unfair. Obama will repeal this
provision so that ordinary families do not
suffer this unfair treatment.
Cap Outlandish Interest Rates on Payday Loans and Improve
Disclosure
In the wake of reports that some service members were paying

800 percent interest on payday loans,
the U.S. Congress took bipartisan action to limit interest rates
charged to service members to 36
percent. Barack Obama believes that we must extend this
protection to all Americans, because
predatory lending continues to be a major problem for low and
middle income families alike. Obama
also believes that we need to ensure that all Americans have
access to clear and simplified information
about loan fees, payments and penalties, which is why he’ll
require lenders to provide this information
during the loan application process. Furthermore, Obama will
work to empower more Americans in
the fight against predatory lending by supporting initiatives to
improve financial literacy and financial
planning.
Encourage Responsible Lending Institutions to Make Small
Consumer Loans
Some mainstream, responsible lending institutions are
beginning to enter the short-term lending market
to provide many Americans with fair alternatives to predatory
lending institutions. These loans
provide a reasonable period of time to be repaid, charge fair
interest rates, and often ensure that the
borrower has the ability to repay the loan on time. Some of
these lending efforts are coupled with
enhanced financial literacy training, which can ensure that
Americans do not become caught in a
never-ending cycle of debt. Barack Obama will work with his
Secretary of Treasury and the Federal
Deposit Insurance Corporation to encourage banks, credit
unions and Community Development
Financial Institutions to provide affordable short-term and small
dollar loans – and to drive the sharks
out of business.

Create a Credit Card Rating System to Improve Disclosure
Barack Obama will create a credit card rating system, modeled
on five-star systems used for other
consumer products, to provide consumers an easily identifiable
ranking of credit cards. Under the
Obama plan, the Federal Trade Commission (FTC) will assess
the degree to which credit cards meet
consumer-friendly standards. The FTC will test for a set of
credit card features that are deemed the
most dangerous for consumers, including the underwriting
standards used to issue the card, the card’s
interest rate spread between the introductory rate and the
maximum rate allowed, and transaction fees.
The FTC will assign ratings so that consumers can easily
understand if a credit card agreement meets
or exceeds standards of safety. Credit card companies will be
required to display the rating on all
application and contract materials, enabling consumers to
quickly understand all of the major
provisions of a credit card without having to rely exclusively on
fine print in lengthy
documents. Credit card companies will also be required to
disclose in simplified, clear language all of
the major features of the card in addition to their FTC rating to
provide consumers with additional
information to compare credit card products.
Establish a Credit Card Bill of Rights to Protect Consumers
Credit cards could turn into the next subprime market crisis, and
New Hampshire families have among
the highest personal debt levels in the country. In addition to
being able to easily understand how risky

a given credit card is, every American should have a uniform
set of rights while dealing with credit
card companies, no matter their financial status or credit
history. To protect those rights, Barack
Obama will require the Federal Trade Commission to analyze
credit card company compliance with
these basic rights, and provide the Department of Justice with
the full authority to investigate and
penalize non-compliant companies. The Obama credit card bill
of rights will:
• Ban Unilateral Changes: Currently, credit card companies can
unilaterally change the terms
of a credit card agreement at any time for any reason with only
a 15-day notice to the
consumer. Barack Obama will ban these unilateral changes in
credit card agreements unless
companies have obtained written consent from consumers and
have followed the rules and
terms of the agreement.
• Apply Interest Rate Increases Only to Future Debt: Credit
card companies often apply
increased interest rates to both new debt incurred by the
cardholder, as well as previously
incurred debt. Barack Obama will require increased interest
rates to apply only to future credit
card debt, and not to debt incurred prior to the increase.
• Prohibit Interest on Fees: Credit card companies often charge
interest on transaction fees,
such as late fees or paying a bill by telephone. Barack Obama

will prohibit credit card issuers
from charging interest on transaction fees.
• Prohibit “Universal Defaults”: “Universal defaults” are a
practice in which a credit card
company raises an individual’s interest rate based on failure to
pay a different creditor on time.
Barack Obama will prohibit this practice.
• Require Prompt and Fair Crediting of Cardholder Payments:
Barack Obama will require
credit card issuers to apply payments first to the credit card
balance with the highest rate of
interest and to minimize finance charges.
V. HEALTH CARE
Although the U.S. offers the best medical technology and
scientific research in the world, too many
middle class Americans are either underinsured or struggling to
pay their monthly premiums because
of the skyrocketing price of health care. Health insurance
premiums have risen four times faster than
wages over the past six years, resulting in many small
businesses and individuals shedding their health
insurance simply because they can’t afford to keep up with
these increases. And the price of
prescription drugs continues to rise unimpeded as well, meaning
that too many low and middle-income
seniors and working families cannot afford the medicines they
need.
Provide Universal Health Care Access and Lower Costs
There are 47 million Americans, including 9 million children,
who lack health insurance, and the vast

majority of the uninsured are part of members working families.
Barack Obama is committed to
signing a universal health care reform plan into law by the end
of his first term as president. The
Obama plan provides every American with affordable, quality
and portable health insurance coverage.
By making strategic investments in health information
technology, prevention, chronic disease
management and streamlining administrative costs, this
proposal will also cut health insurance costs by
$2,500 per year for middle class families. The Obama proposal
will also take on the big drug and
insurance companies to ensure that Americans have access to
safe and cheap prescription drugs, and
that bureaucratic obstacles do not get in the way of effective
medical treatment.
Obama will create a new national health plan that allows
Americans to purchase affordable health
coverage similar to that given to Members of Congress, and
Obama will also create a National Health
Insurance Exchange for individuals to purchase affordable and
quality private insurance. The Obama
reform plan will feature guaranteed eligibility so no American
will be turned away from any insurance
plan because of illness or pre-existing conditions. The new
public program will also be available to
self-employed business owners and other small businesses that
want to offer insurance to their
employees, but cannot because of the prohibitive costs of

insurance. Obama will ensure that low and
middle-income Americans can afford health insurance coverage
by providing an income-based sliding
scale subsidy to people and families who need it.
VI. PROVIDE GREATER RETIREMENT SECURITY
Strengthen Social Security
Barack Obama recognizes that Social Security is indispensable
to workers and seniors, and it is
probably the most important and most successful programs that
our country has ever made. Obama is
committed to making sure Social Security is solvent and viable
for the American people, now and in
the future.
Although the underlying Social Security system remains strong,
the projected long-term cash flow of
the program needs to be addressed, particularly as the baby
boom generation begins to retire. This is a
real but manageable problem. Obama will be honest with the
American people about the solvency of
Social Security and the ways we can address the shortfall.
Obama will make it a top priority of his
administration to protect Social Security benefits for current
and future beneficiaries alike. And he
does not believe it is necessary or fair to hardworking seniors to
raise the retirement age. He will also
continue his long record of opposing the privatization of Social
Security, which has dominated the
debate in Washington for too long.
Barack Obama believes that the first place to look for ways to
strengthen Social Security is the payroll
tax system. Currently, the Social Security payroll tax applies to
only the first $97,500 a worker makes.

Obama supports increasing the maximum amount of earnings
covered by Social Security and he will
work with Congress and the American people to choose a
payroll tax reform package that will keep
Social Security completely solvent for at least the next half
century.
Create Automatic Workplace Pensions
Currently, 75 million working Americans – roughly half the
workforce – lack employer-based
retirement plans. Even when workers are given the option of
joining employer-based plans, many do
not take up the option because it requires considerable work to
research plans and investment
portfolios, and to enroll in the plan. However, test studies of
automatic enrollment retirement plans
have found that when employees, including low-income
employees who are the least likely to save, are
given easy options to save, they overwhelmingly choose to do
so. Various automatic enrollment tests
have resulted in enrollment rates between 75 and 90 percent.
Barack Obama’s automatic workplace pension plan will
dramatically increase both the number of
Americans who save for retirement and the overall amount of
personal savings for individuals. Under
this plan, employers who do not currently offer a retirement
plan, will be required to automatically
enroll their employees in a direct-deposit IRA account.
Employees may opt-out by signing a written
waiver. Even after enrollment, employees will retain the right
to change their savings levels,
reallocate investment portfolios or end contributions to the
account. Obama’s plan will give options to
the self-employed to access new easy-to-enroll savings plans
and direct the IRS to deposit tax refunds

into those savings plans for people who choose to save some of
their refunds. Under the Obama plan
when employees change jobs, their savings will be
automatically rolled over into the new employer’s
system to ensure continued savings.
To minimize administrative burdens on employers, Obama will
set up a direct-deposit system that is
compatible with the existing direct-deposit payroll system that
most large employers already utilize.
For most firms, offering payroll deduction IRAs will involve
little cost since the employer will not be
maintaining a plan; rather they would be acting as a forwarding
agent for employee contributions. In
addition, Obama will make temporary tax credits available to
firms to defer the cost of establishing
these plans. Firms with fewer than 10 employees or who have
been in business for less than two years
will be exempt from this requirement, but may take advantage
of this low-cost opportunity to offer a
saving plan for their employees if they so choose.
Obama will also require annual disclosures to plan participants
that detail in clear and simple language
the amount of fees incurred and investments made. This
measure will help ensure that retirement plans
actually help workers over time, rather than investment and
consulting firms. Obama will also require
that businesses choose a default investment plan that has an
investment portfolio similar to that of the

federal Thrift Savings Plan, low-management fees and does not
include company stock.
This program is projected to dramatically increase savings by
low- and middle-income workers who do
not currently save. In fact, experts estimate that this program
will increase the participation rate for
them from its current 15 percent level to around 80 percent.
Expand Retirement Savings Incentives for Working Families
Barack Obama will ensure savings incentives are fair to all
workers by creating a generous savings
match for low and middle-income Americans. Obama will
expand the existing Savers Credit to match
50 percent of the first $1,000 of savings for families that earn
under $75,000, and he will make the tax
credit refundable. To help ensure that this proposal actually
strengthens retirement investments, the
savings match will be automatically deposited into designated
personal accounts by using the account
information listed on IRS tax filings. Coupled with the
automatic workplace pension plan, this
proposal will stimulate tens of millions of new Americans to
invest for retirement. Over 80 percent of
the savings incentives will go to new savers, and 75 percent of
people eligible for the incentives who
are expected to participate in the new program do not currently
save.
Require Full Disclosure of Company Pension Investments
Barack Obama believes we must ensure private companies
properly fund their pension plans so
taxpayers do not end up footing the bill. However, even when
companies fund their pensions, many do
not disclose their investments with the employee’s pension
dollars. This lack of transparency can

make it easier for fund managers to make imprudent or even
fraudulent investment decisions. Obama
will ensure that all employees who have company pensions
receive annual disclosures about their
pension fund’s investments, including full details about which
projects have been invested in, the
performance of those investments and appropriate details about
probable future investments strategies.
This measure will provide employees and retirees important
resources to make their pension fund more
secure.
VII. MAKE COLLEGE AFFORDABLE FOR ALL
To be successful in the 21st Century economy, America’s
workforce must be more innovative and
productive than our competitors. Giving every American the
opportunity to attend and afford and be
successful in college is critical to meeting that challenge. As
tuition costs swell and grant-aid fails to
keep pace, students and their families are having a harder time
paying for college.
• College costs have grown nearly 40 percent in the past five
years
• 60 percent of all college graduates leave college with debt.
• The average graduates leaves college with over $19,000 in
debt
• Between 2001 and 2010, 2 million academically qualified
students will not go to college
because they cannot afford it.

• Only 12 percent of Hispanics and 16 percent of African
Americans eventually earn a bachelor’s
degree – compared with 33 percent of White students. The
rising cost of college is a factor in
this disparity.
These trends not only threaten our competitiveness in the global
marketplace, but also our ability to
maintain and improve our economy at home. Higher education
is also the key to reversing the income
disparities that are dividing our nation into haves and have-nots.
The earnings of Americans who have
only a high school degree have fallen steadily for three decades,
while college graduate income has
continued to rise during this same period.
In the 1990s, Congress crafted a system of tax credits to
supplement the existing federal loan and grant
programs to make college more affordable. While these credits
have helped, college still remains out
of reach for far too many students. The HOPE Scholarship and
Lifetime Learning tax credits, in
particular, have been inadequate in making college more
affordable for low-income students for two
reasons. First, these credits are not fully refundable. A family
of four must earn above $30,000 to
claim the maximum credits, and studies have shown that up to
half of eligible families cannot claim the
credits because their income is too low. Second, our current
system is a complicated maze of federal
tax credits, grants, and student loan programs. As a result, far
too many students are unaware of
student financial aid that can help make college more affordable

and fail to take advantage of existing
federal aid programs. And those students receive the aid far too
late – up to a year or more after they
make the decision to attend college.
Simplify the Application Process for Financial Aid
The application process for financial aid is cumbersome and
evidence shows it may be a reason why
students never apply for college. Research has shown that the
low take-up rate of the Pell Grant and
HOPE and Lifetime Learning tax credit programs is likely due
to the complexity of the application
process. The current Free Application for Federal Student Aid
(FAFSA) is 5 pages and 127 questions
– making it longer and more involved than many federal tax
returns. Not surprisingly, over 1.5 million
high school students failed to apply for aid in 2004, despite
being eligible for a Pell Grant. A recent
study by Susan Dynarski and Judith Scott-Clayton found that
the costs of complexity in our financial
aid processes fall most heavily on low-income, non-white, and
non-English speaking youth. Barack
Obama will simplify the financial aid process by eliminating the
FAFSA and its complicated
calculations altogether. Instead, aid would be based on a much
simpler yet equally accurate formula, so
that students can predict their eligibility well in advance. The
aid process will be streamlined by
enabling families to apply simply by checking a box on their tax
form, authorizing their tax
information to be used and eliminating the need for a separate
application.
American Opportunity Tax Credit
Barack Obama will make college affordable for all Americans
by creating a new American

Opportunity Tax Credit. This universal and fully refundable
credit will ensure that the first $4,000 of a
college education is completely free for most Americans, and
will cover two-thirds the cost of tuition
at the average public college or university. And by making the
tax credit fully refundable, Obama’s
credit will help low-income families that need it the most.
Obama will also ensure that the tax credit is
available to families at the time of enrollment by using prior
year’s tax data to deliver the credit at the
time that tuition is due, rather than a year or more later when
tax returns are filed.
Help Students Become Aware of College Readiness
Another common reason that high school students decide not to
attend college is that they discover
they are unprepared for it in 12th grade. By that time, it is too
late for many of them to do anything to
address the problem before they graduate. Some states have
developed an Early Assessment Program
that enables 11th graders and their families to ascertain if they
are on track to be college ready by the
time they graduate. The voluntary test and the presentation of
results are specifically designed to
inform students what they need to do to prepare for college
while they still have time to do it. This
program will increase college readiness and is voluntary.
Barack Obama will provide $25 million
annually in matching funds for states to develop Early
Assessment Programs. These funds will also

promote state efforts to raise awareness about the availability of
federal and state financial aid
programs.
Expanded Pell Grants for Low-Income Students
Two decades ago, the maximum Pell Grant covered 55 percent
of costs at a public four-year college,
compared with only 32 percent today. The first bill Barack
Obama introduced in the U.S. Senate
would have helped make college more affordable for many
Americans by increasing the maximum
Pell Grant from the limit of $4,050 to a new maximum of
$5,100. Obama has worked in a bipartisan
way on the Senate Health Education Labor and Pensions
Committee to achieve an increase in the Pell
Grant to $5,400 over the next few years. As president, Obama
will continue to work to ensure that the
maximum Pell Grant award is increased for low-income
students. Specifically, he will ensure that the
award keeps pace with the rising cost of college inflation.
Community College Partnership Program
Community colleges are a vital component of our higher
education system, serving 12 million people
each year, almost half the undergraduate students in the U.S.
Without community colleges, millions of
people would not be able to access the education and skills they
need to further education or succeed in
the workplace. Barack Obama will create a Community College
Partnership Program to strengthen
community colleges by providing grants to (a) conduct more
thorough analysis of the types of skills
and technical education that are in high demand from students
and local industry; (b) implement new
associate of arts degree programs that cater to emerging
industry and technical career demands; and (c)

reward those institutions that graduate more students and also
increase their numbers of transfer
students to four-year institutions. These efforts will ensure that
community college students are able to
directly use their skills in the workforce following graduation,
and be prepared to continue their higher
education. And the grants will support programs that facilitate
transfers from two-year institutions to
four-year institutions.
Eliminate Costly Bank Subsidies
Currently, there are two basic college loan programs: the Direct
Loan system, funded publicly, and the
Federal Family Education Loan Program, funded privately by
banks and lenders who receive subsidies
and guarantees from the government. Privately funded loans
cost more per loan than the Direct Loan
program and provide no greater benefits. Obama will save
taxpayer money billions by eliminating the
more expensive private loan program, and directing that money
into aid for students.
VII. A COMMITMENT TO FISCAL RESPONSIBILITY
Barack Obama will implement these proposals in a fiscally
responsible manner that does not increase
the federal deficit. Obama will use savings from his proposal to
require that all federal contract orders
over $25,000 be competitively awarded; slash congressional
earmark spending to no greater than year
2001 levels; and eliminate wasteful subsidies to private student
lenders. Obama will also reform
Internal Revenue Service collection of capital gains taxes by
ensuring that the basis and sale price of
the investment are accurately reported to cut a significant
portion of the capital gains tax gap.

Fin 480 Real Estate Appraisal Exam 1 v1INSTRUCTIONSBefor.docx

Fin 480 Real Estate Appraisal Exam 1 v1INSTRUCTIONSBefor.docx

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