I'm probably late to this party where everyone seems to be hating on the President's plan, but I'll chime in since this plan would have had a huge affect on me.
I'm one of those people who didn't apply themselves in highschool and didn't have anyone push me to do well. I couldn't afford to go to uni because my parents made just enough so that I couldn't get any aid. They also didn't have money to spare and were smart enough not to cosign loans for me to go to a university. Who can blame them? Its crazy to spend 10s of thousands of dollars to take intro classes that are basically just substitutes for how terrible our k-12 system is. My parents did encourage me to go to college though, so I went to one nearby right after highschool.
I would like to point out that even though its cheap, if you aren't in district its quite a bit more expensive. I think it ended up being around $100 a credit hour where I went since I wasn't in district. I know that is peanuts compared to universities, but if you have to pay out of packet, it adds up really quick, especially with books etc.
I was lucky that my parents let me use their car and live at home for free. Because of this, I could pay for the classes outright by working 30 or so hours a week at minimum wage. Its really depressing to work for months and all summer, saving virtually all of the money you make, and then blow at the start of each semester.
Ultimately this worked out well for me though, because by getting high grades and most of an associates degree, I was able to get significant transfer scholarships and not have to take a bunch of pointless intro classes. I'm not saying that all liberal arts classes are pointless, but some of them are, and it feels like hell to have to pay for those classes out of pocket, especially when you make minimum wage (which was $7.40 at the time). I would rather just read a book on a subject than take a class in something that I only have passing interest in.
I still have some debt from university due to double majoring and adding another year (which is when my scholarships ran out), but I still got out with I will say that I meant quite a few people abusing the Pell grants though. People who lived at home for free and had no ambition would get Pell grants which covered their classes and gave them an overage for living expenses. They would just take the easiest classes and pocket the overage check. It was like a job for them. So I'm sure there will be people trying to do the same here, and there will be sleazy schools trying to get a chunk of the money too, but those are just problems that need to be solved.