The Fight Over Student Loans
President Obama makes the case for college affordability
The excitement was palpable at the University of North Carolina (UNC) in Chapel Hill last Tuesday. People of all ages had come to hear President Barack Obama speak about the growing student debt crisis in the United States.
Many of the people in the crowd were college students. They had a special stake in what President Obama had to say. They could find themselves in major debt when they graduate. And with student loan interest rates scheduled to double on July 1 (from 3.4 percent to 6.8 percent), students could see their loan costs rise an average of $5,000.
In order for interest rates to stay low, Congress must pass legislation. At UNC, President Obama said Congress needs to extend low interest rates on student loans because they are saving middle-class families millions of dollars and making higher education accessible to everyone.
"Congress needs to safeguard aid for low-income students, like Pell grants, so that today's freshmen and sophomores know that they'll be able to count on it," the President said. "Helping more of our young people afford college, that should be at the forefront of America's agenda. It shouldn't be a Republican or a Democratic issue. This is an American issue."
Late last week, the Republican-controlled House of Representatives passed a bill that would keep college loan rates at 3.4 percent. But to pay for it, the House would take money out of the budget for President Obama's health care reform.
The President has said he will veto it, calling it "a politically motivated proposal." President Obama and Democrats in Congress want to pay for low college loan rates by raising tax rates on millionaires and closing tax loopholes.
"I don't want this to be a country where a shrinking number of Americans are doing really, really well, but a growing number of people are just struggling to get by," the President said at UNC. "I want this forever to be a country where everybody gets a fair shot."
Currently, the unemployment rate for Americans with a college degree is half the national average. The incomes of Americans with a college degree are twice as high as those without.
"Higher education is the single most important investment you can make in your future," the President told the audience.
But the President said he doesn't want that investment to come at a crushing cost — to students, their future, or the nation.
"Americans now owe more on their student loans than they do on their credit cards," President Obama said. "And living with that kind of debt means that this generation is not getting off to the same start that previous generations — because you're already loaded up with debt. So that means you've got to make pretty tough choices when you are first starting out. You might have to put off buying a house. It might mean that you can't go after that great idea for a startup that you have, because you're still paying off loans. Maybe you've got to wait longer to start a family, or save for retirement."
The crowd agreed with the President's statements. Higher education should be accessible to anyone who is willing to work hard.
"My first year of school I have had two part time jobs — I work around 20 hours a week," said Jackson Bloom, a freshman at UNC. "Though I do not have loans, I am grateful for the President's initiative. I do not want to live in a world where all income goes to paying off college loans."
As Congress and the President battle over how to pay for low student loan interest rates, President Obama and presumptive Republican presidential nominee Mitt Romney have begun working to capture the youth vote. That could lead to student loan debt developing into a major campaign issue in the 2012 presidential election.
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