President Barack Obama is promoting his student loan proposals to young voters as students are taking to the streets to mark what they call 1TDay—the day when the U.S. student debt reaches $1 trillion.
The Occupy Student Debt Campaign has organized rallies around the United States this week, including in Washington, D.C., on April 23 and in New York on April 25. The Occupy movement is aiming to draw attention to the “predatory student loan industry” and is supporting a petition calling for student loan forgiveness.
The Federal Reserve Bank of New York estimates that about 15 percent of Americans, or 37 million people, have outstanding student loan debt and about two-thirds of that debt is held by people under 30.
The rallies come as President Obama toured to three different universities on April 24, to talk about his administration’s student loan proposals, which include preventing subsidized student loan rates increasing from 3.4 percent to 6.8 percent July 1.
“Stafford” loans, which account for about half of federal education borrowing and would affect around 7 million families, were nominated in 2007 by a Democrat-dominated Congress that voted to cut the then-rates by half until 2012.
Speaking at the University of North Carolina before proceeding to the University of Colorado and the University of Iowa later in the day, President Obama told students that higher education was “the single most important investment you can make in your future.”
While America had always set education as a priority, it was becoming less accessible at a time when it was gaining in importance, he said.
“The fact is that, since most of you were born, tuition and fees at America’s colleges have more than doubled. And that forces students like you to take out a lot more loans. There are fewer grants. You rack up more debt,” he said.
Student debt now averages around $25,250, according to a study conducted by the Institute for College Access & Success (TICAS), up by 5 percent from the year before.
The study also noted that debt varied from $950 to $55,250, with over 98 colleges reporting that their 2010 graduates owed an average of more than $35,000.
“Americans now owe more on their student loans than they do on their credit cards,” Obama said.
“We have to make college more affordable for our young people. That’s the bottom line.”
He called on students to lobby their Congressional representatives to support his proposals, which include capping monthly loan repayments at 10 percent of a student’s discretionary income as opposed to the present 15 percent; implementing loan forgiveness after 20 years of responsible payments as opposed to the current 25 years; and fully funding Pell Grants through 2014–15.
Students Support Initiative
Maria Dahlmann, a medical student at New York University (NYU), said her study program included an internship that prevented her from working at the same time. Any interest rate rise would have a huge impact she said. “It would really affect the length of my studies.”
Melissa Mcintyre, an NYU media, culture, and communications student, said the initiatives would impact her loan too, but believes Obama’s proposals do not go far enough.
“Thirst for knowledge should not be a commodity,” she said. Mcintyre would like to see the loans “expunged completely.”
“I actually feel education should be a rite of passage, and public education should be accessible by everybody, and not just people who are able to take out student loans,” she told The Epoch Times.
House Republicans have sympathized with students, but say Obama is just creating a distraction. They have not indicated that they will support the proposals.
“No one wants to see students pay more for their education,” Brendan Buck, a spokesman for House Speaker John Boehner (R-Ohio), said on his blog. “This is just another effort by the president to distract from his economic record that is leaving the 50 percent of new graduates jobless or underemployed.”
However, Mitt Romney, likely Republican presidential nominee, said he will support the interest rate retention.
“I support extending the temporary relief on interest rates for students,” Romney told reporters while campaigning in Pennsylvania on April 23. He did not elaborate on any further details.
Arne Duncan, U.S. secretary of education, reacted strongly to accusations that the proposals were a “wedge issue,” saying it wasn’t a “Republican or Democratic issue” but “a skills crisis.”
“It’s fascinating to me that in a really tough economic time like this, we have 2 million high-wage, high-skilled jobs that are unfilled because we’re not producing the employees with the skills that employers are looking for,” he told reporters at a White House press briefing on April 20.
“We don’t just have a jobs issue now, we have a skills crisis. We have to close that skills gap. The only way we do that is to have a lot more young people graduate from high school and go on to college.”