Illinois college loan for education majors

August 10, 2000

The President. Thank you very much, Ken. Ladies and gentlemen, thank you for this warm welcome. I didn't know if we could stir up so many students in the middle of the summer. [Laughter] But I'm delighted to see you all here.

I want to thank Representative Rob Blagojevich for joining me, and also, behind me, Representative Bobby Rush and John Stroger and Tom Hines. And there are a lot of other of my friends here, but I want to thank them all for coming. And I want to recognize that I have one special young man who works for me in the Department of Cabinet Affairs in the White House, Sean O'Shea, who is here with me. He's an alumnus of DePaul.

There's been a lot of talk in the press lately about this whole issue of legacy, and that means when you've got one leg in the political grave, that's what they start talking to you about. [Laughter] But I think I should, note that DePaul educated two generations of Daley mayors. Now, that's a real legacy. And I congratulate you on that.

I also--I saw that Princeton Review survey saying that your students were the happiest. And I thought to myself, they're not happy because there are no academic standards here. That would be bad. [Laughter] They must be happy because of the atmosphere, the culture, the way people relate to each other across all their differences. And that is an enormous tribute, and you should be very proud of that. And maybe it has something to do with the basketball team, too. [Laughter]

Let me say to all of you, we are here because all of us know that when we open the doors of college, we open the doors of opportunity; we give people the chance to live out their own dreams. And in the process, we strengthen our Nation and our ability to contribute to the progress of the entire world.

I got to go to college because I had, in college and law school, scholarships, loans, and lots of jobs. And if I hadn't had all three of those things, I wouldn't have had a chance to go. And if I hadn't had a chance to go, I wouldn't be here today.

I think it is important to recognize that while a college education has always been profoundly significant for certain jobs, like the one that you've made it possible for me to hold over the last 7 1/2, it's more important than it's ever been for all kinds of people in all kinds of ways.

The number of new jobs in the years just ahead requiring a bachelor's degree will grow twice as fast as those which don't. The three fastest growing occupations require at least a bachelor's degree, and all three pay much better than average wages. Twenty years ago college graduates earned about 40 percent more than high school graduates. In the new information economy, the gap has almost doubled. If we value opportunity for all, as we say we do here in America, we have to provide all Americans access to opportunity, and that means access to college.

From the very start, our administration has worked hard on this. I was telling our panelists on the way out here, I got interested in this whole issue when I was Governor, and we basically got rid of State tuition for everybody in our State that had a certain grade average or above. And we increased scholarships and loan aids.

But I got into it because in the 1980's I kept running into young people who told me that they had started college and dropped out because they had become convinced they would never be able to repay all their loans, especially those, ironically, that we needed the most, the ones who wanted to be police officers, teachers, nurses, that wanted to be in the serving, helping, socially strengthening professions. And we can't allow that to happen.

I just talked to your president, Father Minogue, on the telephone over in Thailand, and he told me that 25 percent of the entering freshman class at DePaul will come from families with incomes of under $40,000. Now, we have got to do something about it. I want to talk today about what we have done, what we're doing now, and what I think we ought to do.

I agree with what the Congressman said. To me, it is one of the proudest achievements of the last 7 years that we've done so much to open the doors of college to everyone. We have more than doubled student aid in 7 years. We've increased Pell grants by more than 40 percent. We rewrote the student loan program to make it easier and cheaper to get student loans and to pay back those loans as a percentage of your disposable income after you get out of school. By doing this, people don't have to choose between paying their loans and choosing a career that may, not be right for them just because it gives them a big enough income to pay their loans back. The direct loan program that we started in 1993, and the competition that it has fostered, have already saved students over $8 billion in loan repayment costs. It's made a big difference.

We expanded work-study slots by over 40 percent. We now have a million of them in colleges and universities throughout the country. We created AmeriCorps, which has now given 150,000--actually, more than 150,000 young people the chance to earn money for college while they serve in communities all across America in remarkable ways. We gave American families a chance to save for college in education IRA's, which meant the income wasn't subject to taxation while they were saving it, and then if the money is taken out of the IRA for the purpose of college education, it's never subject to taxation.

And of course, in 1997 we created the $1,500 HOPE scholarship tax credit, which effectively made 2 years of high school education--post-high-school education free in every community college in the country but was obviously available to people who went to 4-year universities as well.

We supplemented that with a lifetime learning tax credit that applied to the junior and senior years of college, graduate schools, and adult education efforts for people to upgrade their skills, to try to create a seamless thread of lifetime learning in our country. Since 1997, over 5 million families have already benefited from the HOPE scholarship tax credit.

Now, this is the biggest increase in college access and college opportunity since the passage of the GI bill right after World War II As a result, we now have, for the first time, over two-thirds of our high school graduates enrolling in college. That's a substantial increase from 1993. But even with all the new forms of financial aid and even though the rise in tuition cost has slowed over the last few years, the vast majority of families with people in college still feel stretched. After all, over the past 20 years, the cost of college has quadrupled. Many parents still take second mortgages or second jobs to pay tuition bills.

That's why, to build on the success of the HOPE scholarship and the lifetime learning credits, I have proposed a landmark $36 billion college opportunity tax cut that will benefit millions of middle class families. It essentially will allow them to deduct up to $10,000 a year in college tuition costs, at a 28 percent rate, whether they're in the 15 percent income tax bracket or the 28 percent income tax bracket. It can be worth, in other words, up to $2,800 a year if the students are in school at a place that has tuition of $10,000 or more.

Today I came here to do two things--to talk to these folks and to announce two other steps to make college more affordable. First, beginning today, the Federal Direct Student Loan Program will reduce interest rates for students who meet their responsibilities and repay their loans on time. This could save more than 2 million students more than--and their parents--$150 through an interest rebate on new loans and $500 on refinancing existing loans.

Right now--I'm very proud of this--right now the student loan default rate is 9 percent. When I became President, when the interest rates were high and the system was not user-friendly, the default rate was 22 percent. So it's gone from 22 down to 9. By rewarding responsibility from borrowers who pay back on time, we can bring that default rate down even more.

At the same time, these two proposals I just mentioned will save students and parents more than $600 million in the next 5 years alone. When you add it up, that will save college students, since 1993, an average of $1,300 on their college loans and lower interest rates and then premiums for paying on time. You don't have to be a math teacher to know that's pretty good arithmetic. [Laughter]

Second, I am pleased to announce a new loan forgiveness program to reward those who teach in our most hard-pressed communities. The students in these communities need the most help from the best teachers. We know that one of the most important things in education, no matter what else we discover, is, has been, and always will be a trained, dedicated, talented teacher.