White House Fact Sheet on the Proposal (see text below): http://www.whitehouse.gov/the-press-office/2014/06/09/factsheet-making-student-loans-more-affordable
Presidential Memorandum (see text below): http://www.whitehouse.gov/the-press-office/2014/06/09/presidential-memorandum-federal-student-loan-repayments
VIDEO (see transcript below): http://www.whitehouse.gov/photos-and-video/video/2014/06/09/president-obama-speaks-student-loan-debt
FACTSHEET: Making Student Loans More Affordable
President Obama declared 2014 a year of action – vowing to use the power of his pen and phone to help ensure that hardworking Americans have the opportunity to succeed. And this week will be no different. With a focus on supporting hardworking Americans and upholding our country’s commitment to provide a quality education for all of our students, the President is again taking action. Today, he will deliver remarks at the White House, announcing new executive actions to further lift the burden of crushing student loan debt, including a Presidential Memorandum that will allow an additional 5 million borrowers with federal student loans to cap their monthly payments at just 10 percent of their income. A fact sheet detailing these new steps is below.
Tomorrow the President will do a live Q and A with Tumblr, answering questions directly from consumers across the country about this crucial issue. At both of those events, and throughout this week ahead of their upcoming vote, the President will use every opportunity to urge Congress to do their part by passing Senate Democrats’ bill to help more young people save money by refinancing their federal student loans.
From reforming the student loan system and increasing Pell Grants to offering millions of students the opportunity to cap their monthly student loan payments at 10 percent of their income, making a degree more affordable and accessible has been a longtime priority for the President. But he knows there is much more work to do and that’s what this week is all about.
FACTSHEET: Making Student Loans More Affordable
A postsecondary education is the single most important investment that Americans can make in their futures. Higher education results in higher earnings and a lower risk of unemployment, but for too many low- and middle-income families this essential rung on the ladder to opportunity and advancement is slipping out of reach. Over the past three decades, the average tuition at a public four-year college has more than tripled, while a typical family’s income has barely budged. More students than ever are relying on loans to pay for college. Today, 71 percent of those earning a bachelor’s degree graduate with debt, which averages $29,400. While most students are able to repay their loans, many feel burdened by debt, especially as they seek to start a family, buy a home, launch a business, or save for retirement.
The President and his Administration have a long track record of taking steps to make college more affordable and accessible for families. And as part of his year of action to expand opportunity for all Americans, the President is committed to building on these efforts by using his pen and his phone to make student debt more affordable and more manageable to repay.
Today the President will use the power of his pen to help millions of borrowers afford their student loan payments. He will sign a new Presidential Memorandum directing the Secretary of Education to propose regulations that would allow nearly 5 million additional federal direct student loan borrowers the opportunity to cap their student loan payments at 10 percent of their income. The Presidential Memorandum also outlines a series of new executive actions aimed to support federal student loan borrowers, especially for vulnerable borrowers who may be at greater risk of defaulting on their loans.
Today the President will also reiterate his call for the Senate to pass legislation that could help an estimated 25 million Americans refinance outstanding student loans at lower interest rates, the same as those available to federal student loan borrowers taking out loans this year. This move could save a typical student $2,000 over the life of his or her loans.
The Challenge of Student Debt: The challenges of managing student loan debt can lead some borrowers to fall behind on their loan payments and in some cases even default on their debt obligation, with such consequences as a damaged credit rating, losing their tax refund, or garnished wages. Because credit ratings are increasingly scrutinized in making employment offers, financing a home, or even opening a bank account, a damaged credit rating can further reduce borrowers’ ability to repay their loans. Today’s actions build on the Administration’s significant progress in creating flexible repayment options for borrowers and raising awareness about the steps borrowers can take to responsibly manage their debt.
Capping Student Loan Payments at 10 Percent of Income: Today, the President will direct the Secretary of Education to ensure that student loans remain affordable for all who borrowed federal direct loans as students by allowing them cap their payments at 10 percent of their monthly incomes. The Department will begin the process to amend its regulations this fall with a goal of making the new plan available to borrowers by December 2015.
With legislation passed by Congress and signed by the President in 2010 and regulations adopted by the Administration in 2012, most students taking out loans today can already cap their loan payments at 10 percent of their incomes. Monthly payments will be set on a sliding scale based upon income. Any remaining balance is forgiven after 20 years of payments, or 10 years for those in public service jobs. However, this Pay As You Earn (PAYE) option is not available to students with older loans (those who borrowed before October 2007 or who have not borrowed since October 2011), although they can access similar, less generous options. No existing repayment options will be affected, and the new repayment proposal will also aim to include new features to target the plan to struggling borrowers.
This executive action is expected to help up to 5 million borrowers who may be struggling with student loans today. For students that need to borrow to finance college, PAYE provides an important assurance that student loan debt will remain manageable. Because the PAYE plan is based in part on a borrower’s income after leaving school, it shares with students the risk of taking on debt to invest in higher education.
Many student loan borrowers are working and trying to responsibly make their monthly payments, but are nonetheless struggling with burdensome debt. For example, a 2009 graduate earning about $39,000 a year as a fourth year teacher, with student loan debt of $26,500, would have his or her initial monthly payments reduced by $126 under the President’s Pay As You Earn plan compared with monthly payments under the standard repayment plan and would see a reduction in annual loan payments of over $1,500.
Doing All We Can to Help Students Repay their Loans: The President today will also direct the Secretaries of Education and the Treasury to work together to do all they can to help borrowers manage their student loan debts. Specifically, the Departments will:
- Strengthen Incentives for Loan Contractors to Serve Students Well: The Department of Education administers the federal student loan program through performance-based contracts with private companies awarded through a competitive process. Rather than specifying every step of the servicing process, as was done in the guaranteed loan program that ended in 2010, these contracts provide companies with incentives to find new and innovative ways to best serve students and taxpayers and to ensure that borrowers are repaying their loans. Today, the Department announced that it will renegotiate its contracts with federal loan servicers to strengthen financial incentives to help borrowers repay their loans on time, lower payments for servicers when loans enter delinquency or default, and increase the value of borrowers’ customer satisfaction when allocating new loan volume. These changes will improve the way that servicers are compensated to better ensure high-quality servicing for student loan borrowers.
- Ensure Active-Duty Military Get the Relief They Are Entitled to: The Servicemember Civil Relief Act requires all lenders to cap interest rates on student loans – including federal student loans — at 6 percent for eligible servicemembers. The Department of Education already directs its loan servicers to match their student borrower portfolios against the Department of Defense’s database to identify eligible active-duty servicemembers. Now, the Department of Education will reduce those interest rates automatically for those eligible without the need for additional paperwork. It will also provide additional guidance to Federal Family Education Loan program servicers to provide for a similar streamlined process.
- Work with the Private Sector to Promote Awareness of Repayment Options: The Secretary of the Treasury and the Secretary of Education will work with Intuit, Inc. and H&R Block, two of the U.S.’s largest tax preparation firms, to communicate information about federal student loan repayment options with millions of borrowers during the tax filing process — a time when people are thinking about their finances. The Administration is continuing its partnership with Intuit. through its TurboTax product, which serves around 28 million tax filers. The Administration will also form a new partnership with H&R Block, serving approximately 15 million tax filers through its 11,000 retail locations, and an additional 7 million tax filers through its digital tax products. Partnerships like these will give us the opportunity to provide information about federal student loan repayment, building upon our work during the most recent tax season by exploring different messages and the timing of information to best help borrowers in evaluating their federal loan repayment options.
- In addition, the Administration will work with Intuit to explore ways to communicate with federal student loan borrowers through Intuit’s free personal financial management product, Mint.com. Mint is used by 15 million people for financial management and advice, and partnering with Mint provides the opportunity to communicate with their 15 million users about income-driven repayment options. Mint includes the capability to provide personalized information about federal loan repayment options, based upon the information that a user has already provided to Mint.
- Use Innovative Communication Strategies to Help Vulnerable Borrowers: Too many borrowers are still unaware of the flexible repayment options currently available to them, especially when they run into difficulties in managing their payments. The Department of Education is redoubling its efforts to identify borrowers who may be struggling to repay and provide them with timely information about their options supporting them through the repayment process and helping them avoid or get out of default. Last year, the Department’s efforts led to more than 124,000 borrowers enrolling in an income-driven repayment plan like Income-Based Repayment or the Pay As You Earn plan Moving forward, the Department of Education will test new ways to reach 2.5 million borrowers with the greatest risk of encountering payment difficulty, such as borrowers who have left college without completing their education, missed their first loan payment, and those who have defaulted on low balances loans to get them back on track with their loan payments. The Department will also evaluate these strategies to identify which can be used on a larger scale and which are the most effective.
- Promote Stronger Collaborations to Improve Information for Students and Families: All student borrowers are required to receive loan counseling when they first borrow federal student loans and when they leave school, but little is known about the effectiveness of these programs. Working with student debt researchers and student advocates, the Department of Education and the Department of Treasury will also develop and launch a pilot project to test the effectiveness of loan counseling resources, including the Department of Education’s Financial Awareness Counseling Tool. The lessons learned will be considered for future actions by the Department and shared with outside partners like the National Association of Student Financial Aid Administrators to improve loan counseling activities at colleges and universities throughout the country. Another way to reach student borrowers is by working with professional associations to provide customized information about repayment options. Today, the Administration is announcing its commitment to work with the American Federation of Teachers, National Education Association, American Association of Colleges of Nursing, American Association of Nurse Practitioners, American Nurses Association, American Association of Physician Assistants, Business Forward, City Year, National Association of Social Workers, Physician Assistants Education Association, SEIU and the YMCA of the USA to provide comprehensive information about repayment options and federal student aid resources that are available to them. Moving forward, the Administration will continue to engage organizations, institutions of higher education, and others to ensure that all borrowers have access to the resources and information they need to responsibly manage the repayment of their student loans.
Additional Actions to Reduce Indebtedness and Promote College Affordability: Helping Students and Families Access Education Tax Benefits. In addition to helping borrowers manage their student loan debt, the Department of Education and the Department of Treasury will also work together to educate students, families, financial aid administrators, and tax preparers to ensure that all students and families understand what education tax benefits they are eligible for and receive the benefits for which they qualify. In 2009, the President created the American Opportunity Tax Credit (AOTC), which provides up to $2,500 to help pay for each year of college. But the process of claiming education tax credits like the AOTC can be complex for many students, including for the 9 million students who receive Pell Grants, and hundreds of millions of dollars of education credits go unclaimed each year. To help address this complexity, the Department of Treasury will release a fact sheet clarifying how Pell Grant recipients may claim the AOTC.
Presidential Memorandum — Federal Student Loan Repayments
June 9, 2014
MEMORANDUM FOR THE SECRETARY OF THE TREASURY
THE SECRETARY OF EDUCATION
SUBJECT: Helping Struggling Federal Student Loan Borrowers Manage Their Debt
A college education is the single most important investment that Americans can make in their futures. College remains a good investment, resulting in higher earnings and a lower risk of unemployment. Unfortunately, for many low- and middle-income families, college is slipping out of reach. Over the past three decades, the average tuition at a public four-year college has more than tripled, while a typical family’s income has increased only modestly. More students than ever are relying on loans to pay for college. Today, 71 percent of those earning a bachelor’s degree graduate with debt, which averages $29,400. While most students are able to repay their loans, many feel burdened by debt, especially as they seek to start a family, buy a home, launch a business, or save for retirement.
Over the past several years, my Administration has worked to ensure that college remains affordable and student debt is manageable, including through raising the maximum Pell Grant award by nearly $1,000, creating the American Opportunity Tax Credit, and expanding access to student loan repayment plans, where monthly obligations are calibrated to a borrower’s income and debt. These income-driven repayment plans, like my Pay As You Earn plan, which caps a Federal student loan borrower’s payments at 10 percent of income, can be an effective tool to help individuals manage their debt, and pursue their careers while avoiding consequences of defaulting on a Federal student loan, such as a damaged credit rating, a tax refund offset, or garnished wages.
While my Administration has made significant strides in expanding repayment options available to borrowers and building awareness of income-driven repayment plans, more needs to be done. Currently, not all student borrowers of Federal Direct Loans can cap their monthly loan payments at 10 percent of income, and too many struggling borrowers are still unaware of the options available to them to help responsibly manage their debt.
Therefore, by the authority vested in me as President by the Constitution and the laws of the United States of America, I hereby direct the following:
Section 1. Expanding the President’s Pay As You Earn Plan to More Federal Direct Loan Borrowers. Within 1 year after the date of this memorandum, the Secretary of Education shall propose regulations that will allow additional students who borrowed Federal Direct Loans to cap their Federal student loan payments at 10 percent of their income. The Secretary shall seek to target this option to those borrowers who would otherwise struggle to repay their loans. The Secretary shall issue final regulations in a timely fashion after considering all public comments, as appropriate, with the goal of making the repayment option available to borrowers by December 31, 2015.
Sec. 2. Improving Communication Strategies to Help Vulnerable Borrowers. By December 31, 2014, the Secretary of Education shall develop, evaluate, and implement new targeted strategies to reach borrowers who may be struggling to repay their Federal student loans to ensure that they have the information they need to select the best repayment option and avoid future default. In addition to focusing on borrowers who have fallen behind on their loan payments, the Secretary’s effort shall focus on borrowers who have left college without completing their education, borrowers who have missed their first loan payment, and borrowers (especially those with low balances) who have defaulted on their loans to help them rehabilitate their loans with income-based monthly payments. The Secretary of Education shall incorporate data analytics into the communications efforts and evaluate these new strategies to identify areas for improvement and build on successful practices.
Sec. 3. Encouraging Support and Awareness of Repayment Options for Borrowers During Tax Filing Season. By September 30, 2014, the Secretary of the Treasury and the Secretary of Education shall invite private-sector entities to enter into partnerships to better educate borrowers about income-based repayment plans during the tax filing season in 2015. Building off of prior work, the Secretaries shall further develop effective ways to inform borrowers about their repayment options during the tax filing season in 2015, as well as through personalized financial management tools.
Sec. 4. Promoting Stronger Collaboration to Ensure That Students and Their Families Have the Information They Need to Make Informed Borrowing Decisions. By September 30, 2014, the Secretary of Education, in consultation with the Secretary of the Treasury, shall develop a pilot project to test the effectiveness of loan counseling resources, including the Department of Education’s Financial Awareness Counseling Tool. The Secretary of Education shall convene higher education experts and student-debt researchers to identify ways to evaluate and strengthen loan counseling for Federal student loan borrowers. Additionally, the Secretaries shall collaborate with organizations representing students, teachers, nurses, social workers, entrepreneurs, and business owners, among others, to help borrowers represented by these organizations learn more about the repayment options that are available to them in financing their investment in higher education and managing their debt, and to provide more comparative, customized resources to those borrowers when possible.
Sec. 5. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect:
(i) the authority granted by law to an agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(d) The Secretary of Education is hereby authorized and directed to publish this memorandum in the Federal Register.
TRANSCRIPT: Remarks by the President on Opportunity for All: Making College More Affordable
1:51 P.M. EDT
THE PRESIDENT: Thank you. Everybody have a seat. Welcome to the White House. And I want to thank Andy for the terrific introduction. And this is commencement season, and it’s always a hopeful and exciting time, and I’ll bet we might have some folks who just graduated here today. Raise your hands. Let’s see — yes, we’ve got a couple of folks who are feeling pretty good. (Laughter.)
Of course, once the glow wears off, this can be a stressful time for millions of students. And they’re asking themselves, how on Earth am I going to pay off all these student loans? And that’s what we’re here to talk about. And Andy I think gave a vivid example of what’s going through the minds of so many young people who have the drive and the energy and have succeeded in everything that they do but because of family circumstances have found themselves in a situation where they’ve got significant debt.
Now, we know, all of you know, that in a 21st century economy, a higher education is the single best investment that you can make in yourselves and your future, and we’ve got to make sure that investment pays off.
And here’s why: For 51 months in a row, our businesses have created new jobs — 9.4 million new jobs in total. And over the last year, we’ve averaged around 200,000 new jobs every month. That’s the good news. But while those at the top are doing better than ever, average wages have barely budged. And there are too many Americans out there that are working harder and harder just to get by.
Everything I do is aimed towards reversing those trends that put a greater burden on the middle class and are diminishing the number of ladders to get into the middle class, because the central tenet of my presidency, partly because of the story of my life and Michelle’s life, is this is a country where opportunity should be available for anybody — the idea that no matter who you are, what you look like, where you come from, how you were raised, who you love, if you’re willing to work hard, if you’re willing to live up to your responsibilities, you can make it here in America.
And in America, higher education opens the doors of opportunity for all. And it doesn’t have to be a four-year college education. We’ve got community colleges, we’ve got technical schools, but we know that some higher education, some additional skills is going to be your surest path to the middle class. The typical American with a bachelor’s degree or higher earns over $28,000 more per year than somebody with just a high school education — 28 grand a year. And right now, the unemployment rate for workers with a bachelor’s degree is about half of what it is for folks with just a high school education.
So you know that this is a smart investment. Your parents know this is a smart investment. That’s why so many of them made such big sacrifices to make sure that you could get into college, and nagged you throughout your high school years. (Laughter.)
Here’s the problem: At a time when higher education has never been more important, it’s also never been more expensive. Over the last three decades, the average tuition at a public university has more than tripled. At the same time, the typical family’s income has gone up just 16 percent.
Michelle and I both went to college because of loans and grants and the work that we did. But I’ll be honest with you — now, I’m old, I’ve got to admit — (laughter) — but when I got out of school, it took me about a year to pay off my entire undergraduate education. That was it. And I went to a private school; I didn’t even go to a public school. So as recently as the ‘70s, the ‘80s, when you made a commitment to college, you weren’t anticipating that you’d have this massive debt on the back end.
Now, when I went to law school it was a different story. But that made sense because the idea was if you got a professional degree like a law degree, you would probably be able to pay it off. And so I didn’t feel sorry for myself or any lawyers who took on law school debt.
But compare that experience just half a generation, a generation ago to what kids are going through now. These rising costs have left middle-class families feeling trapped. Let’s be honest: Families at the top, they can easily save more than enough money to pay for school out of pocket. Families at the bottom face a lot of obstacles, but they can turn to federal programs designed to help them handle costs. But you’ve got a lot of middle-class families who can’t build up enough savings, don’t qualify for support, feel like nobody is looking out for them. And as Andy just described vividly, heaven forbid that the equity in their home gets used up for some other family emergency, or, as we saw in 2008, suddenly home values sink, and then people feel like they’re left in the lurch.
So I’m only here because this country gave me a chance through education. We are here today because we believe that in America, no hardworking young person should be priced out of a higher education.
This country has always made a commitment to put a good education within the reach of young people willing to work for it. I mentioned my generation, but think about my grandfather’s generation. I just came back from Normandy, where we celebrated D-Day. When that generation of young people came back from World War II, at least the men, my grandfather was able to go to college on the GI Bill. And that helped build the greatest middle class the world has ever known.
Grants helped my mother raise two kids by herself while she got through school. And she didn’t have $75,000 worth of debt, and she was raising two kids at the same time. Neither Michelle or I came from a lot of money, but with hard work, and help from scholarships and student loans, we got to go to great schools. We did not have this kind of burden that we’re seeing, at least at the undergraduate stages. As I said, because of law school, we only finished paying off our own student loans just 10 years ago. So we know what many of you are going through or look forward — or don’t look forward to. (Laughter.) And we were doing it at the same time — we already had to start saving for Malia and Sasha’s education.
But this is why I feel so strongly about this. This is why I’m passionate about it. That’s why we took on a student loan system that basically gave away tens of billions of taxpayer dollars to big banks. We said, let’s cut out the middle man. Banks should be making a profit on what they do, but not off the backs of students. We reformed it; more money went directly to students. We expanded grants for low-income students through the Pell grant program. We created a new tuition tax credit for middle-class families. We offered millions of young people the chance to cap their student loan payments at 10 percent of their income — that’s what Andy was referring to. Michelle right now is working with students to help them “Reach Higher,” and overcome the obstacles that stand between them and graduation. This is something we are deeply invested in.
But as long as college costs keep soaring, we can’t just keep throwing money at the problem. We’re going to have to initiate reforms from the colleges themselves. States have to invest more in higher education. Historically, the reason we had such a great public education system, public higher education system was states understood we will benefit if we invest in higher education. And somewhere along the line, they started thinking, we’ve got to invest more in prisons than we do in higher education. And part of the reason that tuition has been jacked up year after year after year is state legislators are not prioritizing this. They’re passing the costs onto taxpayers. It’s not sustainable.
So that’s why I laid out a plan to shake up our higher education system and encourage colleges to finally bring down college costs. And I proposed new rules to make sure for-profit colleges keep their promises and train students with the skills for today’s jobs without saddling them with debt. Too many of these for-profit colleges — some do a fine job, but many of them recruit kids in, the kids don’t graduate, but they’re left with the debt. And if they do graduate, too often they don’t have the marketable skills they need to get the job that allows them to service the debt.
None of these fights have been easy. All of them have been worth it. You’ve got some outstanding members of Congress right here who have been fighting right alongside us to make sure that we are giving you a fair shake. And the good news is, more young people are earning college degrees than ever before. And that’s something we should be proud of, and that’s something we should celebrate.
But more of them are graduating with debt. Despite everything we’re doing, we’re still seeing too big a debt load on too many young people. A large majority of today’s college seniors have taken out loans to pay for school. The average borrower at a four-year college owes nearly $30,000 by graduation day. Americans now owe more on student loans than they do on credit cards. And the outrage here is that they’re just doing what they’ve been told they’re supposed to do. I can’t tell you how many letters I get from people who say I did everything I was supposed to and now I’m finding myself in a situation where I’ve got debts I can’t pay off, and I want to pay them off, and I’m working really hard, but I just can’t make ends meet.
If somebody plays by the rules, they shouldn’t be punished for it. A young woman named Ashley, in Santa Fe, wrote me a letter a few months ago. And Ashley wanted me to know that she’s young, she’s ambitious, she’s proud of the degree she earned. And she said, “I am the future” — she put “am” in capital letters so that I’d know she means business. (Laughter.) And she told me that because of her student loan debt, she’s worried she’ll never be able to buy a car or a house. She wrote, “I’m not even 30, and I’ve given up on my future because I can’t afford to have one.” I wrote her back and said it’s a little early in your 20s to give up. (Laughter.) So I’m sure Ashley was trying to make a point, but it’s a point that all of us need to pay attention to. In America, no young person who works hard and plays by the rules should feel that way.
Now, I’ve made it clear that I want to work with Congress on this issue. Unfortunately, a generation of young people can’t afford to wait for Congress to get going. The members of Congress who are here are working very hard and putting forward legislation to try to make this stuff happen, but they have not gotten some of the support that they need. In this year of action, wherever I’ve seen ways I can act on my own to expand opportunity to more Americans, I have. And today, I’m going to take three actions to help more young people pay off their student loan debt.
Number one, I’m directing our Secretary of Education, Arne Duncan, to give more Americans who are already making their loan payments a chance to cap those payments at 10 percent of their income. We call it “Pay As You Earn.” We know it works, because we’ve already offered it to millions of young people. It’s saving folks like Andy hundreds of dollars potentially every month. It’s giving graduates the opportunity to pursue the dreams that inspired them to go to school in the first place, and that’s good for everybody. And we want more young people to start their own businesses. We want more young people becoming teachers and nurses and social workers. We want young people to be in a position to pursue their dreams. And we want more young people who act responsibly to be able to manage their debt over time. So we’re announcing steps that will open up “Pay As You Earn” to nearly 5 million more Americans. That’s the first action we’re taking today.
The second action is to renegotiate contracts with private companies like Sallie Mae that service our student loans. And we’re going to make it clear that these companies are in the business of helping students, not just collecting payments, and they owe young people the customer service, and support, and financial flexibility that they deserve. That’s number two.
Number three — we’re doing more to help every borrower know all the options that are out there, so that they can pick the one that’s right for them. So we’re going to work with the teachers’ associations, and the nurses’ associations, with business groups; with the YMCA, and non-profits and companies like TurboTax and H&R Block. And tomorrow, I’m going to do a student loan Q&A with Tumblr to help spread the word — you’re laughing because you think, what does he know about Tumblr? (Laughter.) But you will recall that I have two teenage daughters so that I am hip to all these things. (Laughter.) Plus I have all these twenty-somethings who are working for me all the time. (Laughter.)
But to give even more student borrowers the chance to save money requires action from Congress. I’m going to be signing this executive order. It’s going to make progress, but not enough. We need more. We’ve got to have Congress to make some progress. Now, the good news is, as I said, there are some folks in Congress who want to do it. There are folks here like Jim Clyburn, John Tierney, who are helping lead this fight in the House. We’ve got Elizabeth Warren, who’s leading this fight in the Senate. Elizabeth has written a bill that would let students refinance their loans at today’s lower interest rates, just like their parents can refinance a mortgage. It pays for itself by closing loopholes that allow some millionaires to pay a lower tax rate than middle-class families.
I don’t know, by the way, why folks aren’t more outraged about this. I’m going to take a pause out of my prepared text. You would think that if somebody like me has done really well in part because the country has invested in them, that they wouldn’t mind at least paying the same rate as a teacher or a nurse. There’s not a good economic argument for it, that they should pay a lower rate. It’s just clout, that’s all. So it’s bad enough that that’s already happening. It would be scandalous if we allowed those kinds of tax loopholes for the very, very fortunate to survive while students are having trouble just getting started in their lives.
So you’ve got a pretty straightforward bill here. And this week, Congress will vote on that bill. And I want Americans to pay attention to see where their lawmakers’ priorities lie here: lower tax bills for millionaires, or lower student loan bills for the middle class.
This should be a no-brainer. You’ve got a group of far-right Republicans in Congress who push this trickle-down economic plan, telling hard-working students and families, “You’re on your own.” Two years ago, Republicans in Congress nearly let student loan interest rates double for 7 million young people. Last year, they tried to strip protections from lower-income students. This year, House Republicans voted overwhelmingly to slash Pell grants and make it harder for thousands of families to afford college. If you’re a big oil company, they’ll go to bat for you. If you’re a student, good luck.
Some of these Republicans in Congress seem to believe that it’s just because — that just because some of the young people behind me need some help, that they’re not trying hard enough. They don’t get it. Maybe they need to talk to Andy. These students worked hard to get where they are today.
Shanelle Roberson — where is Shanelle? Shanelle is the first in her family to graduate from a four-year college. (Applause.) Shanelle is not asking for a handout, none of these folks are. They’re working hard. They’re working while they’re going to school. They’re doing exactly what we told them they should do. But they want a chance. If they do exactly what they’re told they should do, that they’re not suddenly loaded up where they’ve got so much debt that they can’t buy a house, they can’t think about starting a family, they can’t imagine starting a business on their own.
I’ve been in politics long enough to hear plenty of people, from both parties, pay lip service to the next generation, and then they abandon them when it counts. And we, the voters, let it happen. This is something that should be really straightforward, just like the minimum wage should be straightforward, just like equal pay for equal work should be straightforward. And one of the things I want all the voters out there to consider, particularly parents who are struggling trying to figure out how am I going to pay my kid’s college education, take a look and see who is that’s fighting for you and your kids, and who is it that’s not. Because if there are no consequences, then this kind of irresponsible behavior continues on the part of members of Congress.
So I ran for this office to help more young people go to college, graduate, and pay off their debt. And we’ve made some really good progress despite the best efforts of some in Congress to block that progress. Think about how much more we could do if they were not standing in the way.
This week, they have a chance to help millions of young people. I hope they do. You should let them know you are watching and paying attention to what they do. If they do not look out for you, and then throw up a whole bunch of arguments that are meant to obfuscate — meaning confuse, rather than to clarify and illuminate — (laughter) — then you should call them to account. And in the meantime, I’m going to take these actions today on behalf of all these young people here, and every striving young American who shares my belief that this is a place where you can still make it if you try.
Thank you, everybody. God bless you. God bless America.
2:12 P.M. EDT