Officials Praise President Obama’s New Student Loan Announcement
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Obama, in an undated photo, told students this week that he's working to make college more affordable for every American.
President Obama announced a new plan to combat student debt on Wednesday that will help millions of students consolidate some loans and see lower interest rates.
The plan, which builds on a measure passed by Congress last year, calls for lower required payments on student loans permitting students to pay just 10 percent of discretionary income from 15. In addition, the administration plans to reform financial aid reporting and loan consolidation.
“Student loan debt has surpassed credit card debt, for first time ever,” Obama said. “Now, living with that kind of debt means making some tough choices when you’re first starting out. It might mean putting off buying a house. It might mean you can’t start a business idea that you’ve got. It may mean that you’ve got to wait longer to start a family, or certainly it means you’re putting off saving for retirement because you’re still paying off your student loans.
“And when a big chunk of every paycheck goes towards student loans instead of being spent on other things, that’s not just tough for middle-class families, it’s painful for the economy and it’s harmful to our recovery because that money is not going to help businesses grow.”
(Read more about the changes here.)
The president made the announced on Wednesday during an appearance at the University of Colorado. He emphasized young people’s role in the recovering economy, noting he plans to use a series of executive actions to pass parts of his job bill after Congress blocked it. The campaign, called “We Can’t Wait,” includes the new changes to the federal student loan program.
The president said he empathized with students borrowing to afford college, noting that he and First Lady Michelle Obama had nearly $120,000 in debt after graduating law school.
“So the idea is, how do we make college more affordable, and how do we make sure you are burdened with less debt?” Obama said. “Now, college—keep in mind, college isn’t just one of the best investments you can make in your future. It’s one of the bets investments America can make in our future.”
Secretary of Education Arne Duncan applauded the plan after the president’s speech, telling reporters it will help students make ends meet.
“We're going to put money back in your pocket, whether it's for paying the rent or paying for groceries,” Duncan said. “We want folks to take advantage of this now.”
Duncan also expressed concern about the difficulties of navigating the financial aid process. He highlighted efforts to standardize the financial aid information given to admitted students. And in addition to current students and recent graduates, the plan is intended to help those who have been out of school for some time but are struggling with student debt.
“Folks who have been struggling in the long term with loans will have opportunities here,” Duncan said. “This is not just for existing students; this is for folks who are out there, who have graduated from college, who are trying to make monthly payments.”
Stubbornly high levels of student debt, Duncan said, damage the economy by drawing talented workers away from low-paying but important jobs, like teaching.
Campus Progress also praised the announcement on Wednesday, with Policy and Advocacy Manager Angela Peoples saying the moves “further demonstrate [Obama’s] commitment to helping students across the country afford college.”
“Young people are facing a staggering unemployment rate and more must be done to address the youth jobs crisis,” Peoples said. “Without swift action from Congress many young people will remain unable to pay for the cost of the education they received.”
Domestic Policy Council Melody Barnes encouraged students to offer feedback on the loan plan, and expressed hope that more students will take advantage of it than its predecessor.
“Only 450,000 people are taking advantage of the current program,” Barnes said. “We're really, really hoping that as we have this conversation with the nation, people will investigate and take advantage of this program.”
The administration is framing the plan as an economic initiative, as well.
“It's a simple choice for all of us as taxpayers,” Duncan said, adding the program will launch “without asking taxpayers to pay a nickel” for it. “Do we want to subsidize banks, or invest in the education of young people?”
But a few executive actions won’t be enough to fix the issues with America’s economy and with the increasingly expensive higher education system, the president said, calling on young people across the country to encourage elected officials to work toward solutions.
“It doesn’t matter if you’re not born wealthy; it doesn’t matter if your dad is disabled or doesn’t own his own home; it doesn’t matter if you’re a single mom who had to take food stamps—you’re still going to get a shot,” Obama said. “You’re still going to get an education.”
Brian Stewart is the journalism and online communications manager at Campus Progress. Jon Christian is a staff writer with Campus Progress. Follow him on Twitter @Jon_Christian.
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