Full Text Obama Presidency August 22, 2013: President Barack Obama’s Speech on College Affordability, College Cost Cutting Plan, Syracuse NY

POLITICAL TRANSCRIPTS

OBAMA PRESIDENCY & THE 113TH CONGRESS:

Remarks by the President on College Affordability, Syracuse NY

Source:  WH, 8-22-13

Henninger High School
Syracuse, New York

6:25 P.M. EDT

THE PRESIDENT:  Hello, Syracuse!  (Applause.)  It is good to be in Syracuse!  (Applause.)

Can everybody give Emilio a big round of applause for a great introduction?  (Applause.)  I think Emilio’s parents are probably here.  Where are Emilio’s parents?  Wave your hands.  There they are right there.  He did pretty good, didn’t he?  We’re very proud of him.  We might have to run him for something.

In addition to Emilio, I want to mention a couple other people.  You already heard from Secretary of Education Arne Duncan, who’s doing a great job every day.  (Applause.)  You’ve got Mayor Stephanie Miner here.  (Applause.)  There she is.  Attorney General Eric Schneiderman is here.  (Applause.)  Your Congressman, Dan Maffei, is here.  (Applause.)  The superintendent of the Syracuse City School District, Sharon Contreras, is here.  (Applause.)  Your principal, Robert DiFlorio, is here.  (Applause.)  And most importantly, a bunch of students are here.  (Applause.)

My understanding is there are students from all five Syracuse high schools here.  You got Corcoran in the house.  (Applause.)  You got Fowler in the house.  (Applause.)  Nottingham.  (Applause.)  The Institute of Technology.  (Applause.)  And our host, Henninger, is here.  (Applause.)  We’re all one family.

Now, I especially want to thank the students because I know that you’re still on summer vacation.  You’ve got a few more days.  So taking the time to be here when you’ve still got a little bit, that last little bit of summer break, that’s a big deal, and I’m very honored to be here with you.

I am on a road trip — by the way, if people have seats, feel free to take a seat.  I’m going to be talking for a while.  If you’ve got no seats, then don’t sit down — (laughter) — because you will fall down.  (Laughter.)

AUDIENCE MEMBER:  We love you!

THE PRESIDENT:  I love you back.  (Applause.)

So I’m here on a road trip through New York into  Pennsylvania.  This morning, I was at the University at Buffalo. Tomorrow, I’ll be at Binghamton University and Lackawanna College in Scranton.  But I wanted to come to Syracuse — (applause) — because you’re doing something fantastic here, with programs like “Say Yes” — (applause) — Smart Scholars Early College High School — these are programs that are helping Syracuse kids get ready for college, and making sure that they can afford to go.

And this is a community effort.  All of you are coming together and you have declared that no child in the city of Syracuse should miss out on a college education because they can’t pay for it.  (Applause.)  And so we’re hoping more cities follow your example, because what you’re doing is critical not just to Syracuse’s future, but to America’s future.  And that’s what I want to talk about briefly here today.

Over the past month, I’ve been visiting towns across the country, talking about what we need to do to secure a better bargain for the middle class and everybody who’s working hard to get into the middle class — to make sure everybody who works hard has a chance to succeed in the 21st century economy.

And we all understand that for the past four and a half years, we had to fight our way back from a brutal recession, and millions of Americans lost their jobs and their homes and their  savings.  But what the recession also did was it showed this emerging gap in terms of the life prospects of a lot of Americans.

What used to be taken for granted — middle-class security

— has slipped away from too many people.  So, yes, we saved the auto industry.  We took on a broken health care system.  (Applause.)  We reversed our addiction to foreign oil.  We changed our tax code that was tilted too far in favor of the wealthy at the expense of working families.  And so we’ve made progress.  Our businesses have created 7.3 million new jobs over the last 41 months.  (Applause.)  We’ve got more renewable energy than ever.  We are importing less oil than in a very long time.

We sell more goods made in America to the rest of the world than ever before.  Health care costs are growing at the slowest rate in 50 years.  Our deficits are falling at the fastest rate in 60 years.

So there’s good news out there.  And thanks to the grit and the resilience of the American people, we’ve been able to clear away the rubble from the financial crisis, and start laying the foundation for a better economy.  But as any middle-class family will tell you, we are not —

AUDIENCE MEMBER:  (Inaudible.)

THE PRESIDENT:  I hear you.  I got you.

AUDIENCE:  Booo —

THE PRESIDENT:  No, no, no, that’s fine.  Wait, wait, wait, wait, wait.  We’re okay.  We’re okay.  That’s okay.  Hold on a second.  Hold on.  Hold on.  Hello, everybody, hello.  Hold on.  Hold on a minute.  Hold on a minute.  Hold on.  So, now — hold on a second.  (Applause.)  Can I just say that as hecklers go, that young lady was very polite.  (Laughter.)  She was.  And she brought up an issue of importance, and that’s part of what America is all about.  (Applause.)

But what America is also all about is making sure that middle-class families succeed, and that people who work hard can get into the middle class.  And what I was saying was is that we’re not where we need to be yet.  We’ve still got more work to do.  Because even before the most recent financial crisis, we had gone through a decade where folks at the top were doing better and better; most families were working harder and harder just to get by.  And we’ve seen growing inequality in our society and less upward mobility in our society.

The idea used to be that here in America anybody could make it.  But part of that was because we put these ladders of opportunity for people.  And, unfortunately, what’s happened is it’s gotten tougher for a lot of folks.  So we’ve got to reverse these trends.  This has to be Washington’s highest priority — how do we make sure everybody gets a fair shake.  That’s got to be our priority.  (Applause.)

Unfortunately, you may have noticed that in Washington, rather than focusing on a growing economy and creating good, middle-class jobs, there’s a certain faction of my good friends in the other party who’ve been talking about not paying the bills that they’ve already run up; who’ve been talking about shutting down the government if they can’t take away health care that we’re putting in place for millions of Americans.

Those are not ideas that will grow our economy.  They’re not going to create good jobs.  They’re not going to strengthen the middle class — they’ll weaken the middle class.  So we can’t afford the usual Washington circus of distractions and political posturing.  We don’t need that.  What we’ve got to do is to build on the cornerstones of what it means to be middle class in America — a good job, good wages, a good education, a home, affordable health care, a secure retirement.  That’s what we need to focus on.  (Applause.)

And we’ve got to create as many pathways as possible for people to succeed as long as they’re willing to work hard.  That’s what’s always made America great.  We don’t judge ourselves just by how many billionaires we produce.  We’ve got to focus on our ability to make sure that everybody who works hard has a chance to pursue their own measure of happiness.

And in that project, in that work, there aren’t a lot of things that are more important than making sure people get a good education.  That is key to upward mobility.  That is key to a growing economy.  That is key to a strong middle class.  (Applause.)

AUDIENCE MEMBER:  We love you!

THE PRESIDENT:  Love you back.  (Laughter.)

Now, everybody here knows that.  That’s why you’re here.  That’s why a lot of your families are making big sacrifices to send kids to college.  You understand that in the face of global competition, a great education is more important than ever.  A higher education is the single best investment you can make in your future.  (Applause.)  Single best.  And I’m proud of all of the students who are working toward that goal.

And in case any of you are wondering whether it’s a good investment, think about these statistics:  The unemployment rate for Americans with at least a college degree is about a third lower than the national average.  The incomes of people with at least a college degree are more than twice what the incomes are of Americans who don’t have a high school diploma.  So more than ever before, some form of higher education — two year, four year, technical college — that’s the path into the middle class.

But the main reason I’m here is to talk about the fact that we’ve seen a barrier and a burden to too many American families, and that’s the soaring cost of higher education.  (Applause.)  The fact is, college has never been more necessary, but it’s also never been more expensive.

Think about this:  Over the past three decades, the average tuition at a four-year public college has risen by more than 250 percent.  The typical family income has gone up 16 percent.  So I wasn’t a math major, but let’s just think about it — college costs, 250 percent; incomes, 16 percent.  What that means is, is that more and more, it’s getting harder and harder for students to be able to afford that college education.  And families are making bigger and bigger sacrifices — including a lot of parents who are putting off their own retirement, their own savings, because they’re trying to help their kids afford a college education.

In the meantime, over the past few years, you’ve got too many states that have been cutting back on their higher education budgets.  Colleges have not been cutting back on their costs, and so what you end up with is taxpayers putting in more money, students and families picking up the tab, but young people are still ending up with more debt.

The average student who borrows for college now graduates owing more than $26,000.  And a lot of young people owe a lot more than that.  I’ve heard from a lot of these young people, and they’re frustrated because they’re saying to themselves, we’ve done everything our society told us we were supposed to do, but crushing debt is crippling our ability to get started in our lives after we graduate.  It’s crippling our self-reliance and the dreams that we had.

At a time when higher education has never been more important or more expensive, too many students face a choice they should not have to make:  Either they say no to college, or they pay the price of going to college and ending up with debt that they’re not sure will pay off.  And that’s not a choice that we should ask young people to make.  That’s not a choice we should accept.

If you think about what built this country, this is a country that’s always been at the cutting edge of making a good education available to more people.  My grandfather, when he came back from World War II, he went — he had the chance to go to college on the GI Bill.  My mother got through school while raising two kids because she got some help.  (Applause.)

Michelle and I, we didn’t come from rich folks.  We did not come from privileged backgrounds.  So we’re only where we are today because scholarships and student loans gave us a shot at a good education.  And we know a little bit about paying back student loans, because we each graduated from college and law school with a mountain of debt.  And even with good jobs, I didn’t pay it off and she didn’t pay off her loans until I was almost a U.S. senator.  I was in my 40s.

So over the past four years, what we’ve done is to try to take some steps to make college more affordable.  First thing we did — we enacted historic reforms to the student loan system.  What was happening was student loans were going through banks; banks were making billions of dollars.  We said why don’t we just give the loans directly to the students, cut out the banks, then we can help more students.  (Applause.)

Then we set up a consumer watchdog that’s already helping families and students sort through all the financial options so they really understand them and they’re not ripped off by shady lenders.  And we’re providing more tools and resources for students and families trying to finance college.  And, by the way, high school seniors, you guys want to start figuring this stuff out — go to studentaid.gov.  That’s a website — studentaid.gov.  And it will give you a sense of what’s available out there.

We took action to cap loan repayments at 10 percent of monthly income for a lot of borrowers who are trying to pay their debt but do so in a responsible way.  (Applause.)

So, overall, we’ve made college more affordable for millions of students and families through tax credits and grants and student loans.  And just a few weeks ago, Democrats and Republicans worked together to keep student loan rates from doubling, and that saves a typical undergraduate more than $1,500 for this year’s loans.  (Applause.)

So, now, that’s all a good start.  But it’s not enough.  The system we have right now is unsustainable, because if it keeps on going up 250 percent a year, your incomes are only going up 16 percent — not 250 percent a year — over a decade — but your incomes are only going up 16 percent, it’s just at a certain point, it will break the bank.  There won’t be enough federal aid to make up for the difference.  And families, at a certain point, aren’t going to be able to send their kids to school.

And state legislatures, they can’t just keep cutting support for public college and universities.  Colleges can’t just keep raising tuition year after year, and pushing these state cutbacks on to students and families, and federal taxpayers are not going to be able to make up all the difference.

Our economy can’t afford the trillion dollars — $1 trillion in outstanding student loan debt.  Because when young people have that much debt, that means they can’t buy a home.  It means they can’t start the business that maybe they’ve got a great idea for. And we can’t price the middle class and everybody working to get into the middle class out of a college education.  (Applause.)    It will put our young generation of workers at a competitive disadvantage for years.

So if a higher education is still the best ticket to upward mobility in America — and it is — then we’ve got to make sure it’s within reach.  We’ve got to make sure that we are improving economic mobility, not making it worse.  Higher education should not be a luxury.  It is a necessity, an economic imperative that every family in America should be able to afford.  (Applause.)

So what are we going to do about it?  Today what I’ve done is propose major new reforms that will shake up the current system.  We want to create better incentives for colleges to do more with less and to deliver better value for our students and their families.

And some of these reforms will require action from Congress, which is always difficult.  (Laughter.)  Some of these changes, though, I can make on my own.  (Applause.)  And we want to work with colleges to keep costs down.  States are going to need to make higher education a higher priority in their budgets.  And by the way, we’re going to ask more from students as well if they’re receiving federal aid.

And some of these reforms won’t be popular for every — with everybody, because some folks are making out just fine under the status quo.   But my concern is not to look out just for the institutions; I want to look out for the students who these institutions exist to serve.  (Applause.)  And I think — I’ve got confidence that our country’s colleges and universities will step up to the plate if they’re given the right incentives.  They, too, should want to do the right thing for students.

So let me be specific.  Here are three things we’re going to do.  Number one, I’m directing my administration to come up with a new ratings system for colleges that will score colleges on opportunity -– whether they’re helping students from all kinds of backgrounds succeed; and on outcomes — whether students are graduating with manageable debt; whether they’re actually graduating in the first place; whether they have strong career potential when they graduate.  That’s the kind of information that will help students and parents figure out how much value a particular college truly offers.

Right now all these ranking systems, they rank you higher if you charge more and you let in fewer students.  But you should have a better sense of who’s actually graduating students and giving you a good deal.  (Applause.)

So down the road we’re going to use these ratings, we hope by working with Congress, to change how we allocate federal aid for colleges.  And we’re going to deliver on a promise that I made last year — colleges that keep their tuition down are the ones that will see their taxpayer funding go up.  We’ve got to stop subsidizing schools that are not getting good results, start rewarding schools that deliver for the students and deliver for America’s future.  That’s our goal.  (Applause.)

Our second goal:  We want to encourage more colleges to embrace innovation, to try new ways of providing a great education without breaking the bank.  A growing number of colleges across the country are testing some new approaches, so they’re finding new ways, for example, to use online education to save time and money.

Some are trying what you’re doing right here in Syracuse -– creating partnerships between high schools and colleges, so students can get an early jump on their degree.  They can graduate faster.  That means they’re paying less in tuition.  I want to see more schools and states get in the game, so more students can get an education that costs less but still maintains high quality.  And we know it can be done.  It’s just we got to get everybody doing it, not just a few schools or a few cities around the country.  That’s the second goal.  (Applause.)

Somebody screamed, and I thought somebody fell, but they were just excited.  (Laughter.)

Number three:  We’re going to make sure that if you’ve taken on debt to earn your degree that you can manage and afford it.  Nobody wants to take on debt, but even if we do a good job controlling tuition costs, some young people are still going to have to take out some loans.  But we think of that as a good investment because it pays off in time -– as long as it stays manageable, as long as you can pay it back.

And remember, again, Michelle and I, we went through this.  It took us a long time to pay off our student loans.  But we could always manage it.  It didn’t get out of hand.  And I don’t want debt to keep young people — some of who are here today — from going into professions like teaching, for example, that may not pay as much money, but are of huge value to the country.  (Applause.)

And I sure don’t want young people not being able to buy a home, or get married, or start a business because they’re so loaded down with debt.  So what we’ve done is two years ago, I capped loan repayments at 10 percent of a student’s income after college.  We called it “pay as you earn.”  And so far this, along with a few other programs, has helped more than 2.5 million students.

But right now, a lot of current and former students aren’t eligible, so we want to work with Congress to fix that so that we got a lot more people who are eligible for this program.  And then the problem is a lot of young people don’t know this program exists.  So we’re going to do a better job advertising this program so that you will never have to pay more than 10 percent of your yearly income in servicing your debt.

And if you’re involved in public service or non-for-profits, then at some point that debt gets forgiven because you’re giving back to society in other ways.  (Applause.)  So we’re going to launch a campaign to help borrowers learn more about their options.  We want every student to have the chance to pay back their loans in a way that doesn’t stop them from pursuing their dreams.

So if we move forward on these three points — increasing value, making sure that young people and their parents know what they’re getting when they go to college; encouraging innovation so that more colleges are giving better value; and then helping people responsibly manage their debt — then we’re going to help more students afford college.  We’re going to help more students graduate from college.  We’ll help more students get rid of their debt so they can get started on their lives.  (Applause.)

And it’s going to take some hard work.  But the people of Syracuse know something about hard work.  (Applause.)  The American people know something about hard work.  (Applause.)

And we’ve come a long way together over these past four years.  I intend to keep us moving forward on this and every other issue.  We’re going to keep pushing to build a better bargain for the middle class and everybody who’s fighting to join the middle class.  And we’re going to keep fighting to make sure that this country remains a country where hard work and studying and responsibility are rewarded.  We’re going to make sure that no matter who you are, or where you come from, or who you love, or what your last name is — (applause) — in the United States you can make it if you try.  (Applause.)

Thank you, Syracuse!  God bless you, and God bless America.

END
6:50 P.M. EDT

Full Text Obama Presidency August 22, 2013: President Barack Obama’s Speech on College Affordability, College Cost Cutting Plan, Buffalo, NY

POLITICAL TRANSCRIPTS

OBAMA PRESIDENCY & THE 113TH CONGRESS:

Remarks by the President on College Affordability — Buffalo, NY

Source: WH, 8-22-13

 

State University of New York Buffalo
Buffalo, New York

11:23 A.M. EDT

THE PRESIDENT:  Hello, Buffalo!  (Applause.)  Hello, Bulls! (Applause.)  Well, it is good to be back in Buffalo, good to be back in the north.  (Applause.)

I want to begin by making sure we all thank Silvana for the wonderful introduction.  Give her a big round of applause.  (Applause.)  Her mom and dad are here somewhere.  Where are they? I know they’re pretty proud.  There they are right there.  Give mom and dad a big round of applause.  (Applause.)

A number of other people I want to acknowledge here — first of all, our Secretary of Education, Arne Duncan, who’s doing a great job.  (Applause.)  One of the finest governors in the country, your Governor, Andrew Cuomo, is here.  (Applause.)  Your outstanding Mayor, Brian Higgins, is here.  Give him a big round of applause.

AUDIENCE:  Congressman!

THE PRESIDENT:  What?

AUDIENCE:  The Mayor is Byron Brown!

THE PRESIDENT:  Byron Brown.  That’s — I’m sorry, Byron.  (Applause.)  What I meant was — your Congressman, Brian Higgins, is here.  (Applause.)  Your Mayor, Byron Brown, is here.  (Applause.)  This is what happens when you get to be 52 years old.  (Laughter.)  When I was 51 everything was smooth.  (Laughter.)  But your Congressman and your Mayor are doing outstanding work.  We just rode on the bus over from the airport, and they were telling me that Buffalo is on the move.  That was the story.  (Applause.)

A couple other people I want to acknowledge — SUNY Chancellor Nancy Zimpher, is here, doing a great job.  (Applause.)  University president Satish Tripathi is here.  (Applause.)   And we’ve got all the students in the house.  Thank all the students for being here.  (Applause.)

Now, today is a check-in day at the dorms.  So I want to thank all the students for taking a few minutes from setting up your futons and — (laughter) — your mini-fridges just to come out here.  I hear that the last sitting President to speak here was Millard Fillmore.  (Applause.)  And he was actually chancellor of the university at the same time — which sounds fun, but I’ve got enough on my plate.  (Laughter.)

This is our first stop on a two-day road trip through New York and Pennsylvania.  (Applause.)  And after this I head to Syracuse — (applause) — yay, Syracuse — to speak with some high schoolers.  Tomorrow I’m going to visit SUNY Binghamton and Lackawanna College in Scranton.  But I wanted to start here at University at Buffalo.  (Applause.)

And I wanted to do it for a couple reasons.  First, I know you’re focused on the future.  As I said, talking to the Mayor, he was describing a new medical school — (applause) — and new opportunities for the high-tech jobs of tomorrow.  So there’s great work being done at this institution.  I also know that everybody here must be fearless because the football team kicks off against Number 2, Ohio State, next weekend.  (Applause.)  Good luck, guys.  (Laughter.)  It’s going to be a great experience.  (Laughter.)  It’s going to be a great experience.  It could be an upset.  (Applause.)

And third, and most importantly, I know that the young people here are committed to earning your degree, to helping this university to make sure that every one of you “Finishes in Four” — (applause) — makes sure that you’re prepared for whatever comes next.  And that’s what I want to talk about here today.

Over the last month, I’ve been visiting towns across the country, talking about — yes, feel free to sit down.  Get comfortable.  (Laughter.)

AUDIENCE MEMBER:  We love you!

THE PRESIDENT:  Thank you.  I love you, too.  (Applause.)

Over the last month I’ve been out there talking about what we need to do as a country to make sure that we’ve got a better bargain for the middle class and everybody who’s working hard to get into the middle class -– a national strategy to make sure that everybody who works hard has a chance to succeed in this 21st century economy.  (Applause.)

Now, I think all of us here know that for the past four and a half years, we’ve been fighting back from a brutal recession that cost millions of Americans their jobs and their homes and their savings.  But what the recession also did was it showed that for too long we’ve seen an erosion of middle-class security.
So, together, we saved the auto industry.  Together, we took on a broken health care system.  (Applause.)  We invested in new technologies.  We started reversing our addiction to foreign oil. We changed a tax code that was tilted to far in favor of the wealthy at the expense of working families.  (Applause.)

And add it all up, today our businesses have created 7.3 million new jobs over the last 41 months.  (Applause.)  We now generate more renewable energy than ever before.  We sell more goods made in America to the rest of the world than ever.  (Applause.)  Health care costs are growing at the slowest rate in 50 years.  Our deficits are falling at the fastest rate in 60 years.  (Applause.)

Here in Buffalo, the Governor and the Mayor were describing over a billion dollars in investment, riverfront being changed, construction booming — signs of progress.  (Applause.)

So thanks to the grit and the resilience of the American people, we’ve cleared away the rubble from the financial crisis. We’ve started to lay the foundation for a stronger, more durable economic growth.

But as any middle-class family will tell you, as folks here in Buffalo will tell you, we’re not where we need to be yet.  Because even before the crisis hit — and it sounds like Buffalo knows something about this — we were living through a decade where a few at the top were doing better and better, most families were working harder and harder just to get by.  Manufacturing was leaving, jobs moving overseas, losing our competitive edge.  And it’s a struggle for a lot of folks.

So reversing this trend should be, must be, Washington’s highest priority.  It’s my highest priority.  (Applause.)  I’ve got to say it’s not always Washington’s highest priority.  Because rather than keeping focus on a growing economy that creates good middle-class jobs, we’ve seen a faction of Republicans in Congress suggest that maybe America shouldn’t pay its bills that have already been run up, that we shut down government if they can’t shut down Obamacare.

AUDIENCE:  Booo —

THE PRESIDENT:  That won’t grow our economy.  That won’t create jobs.  That won’t help our middle class.  We can’t afford in Washington the usual circus of distractions and political posturing.  We can’t afford that right now.

What we need is to build on the cornerstones of what it means to be middle class in America, focus on that — a good job with good wages, a good education, a home of your own, affordable health care, a secure retirement.  (Applause.)  Bread-and-butter, pocketbook issues that you care about every single day; that you’re thinking about every single day.  And we’ve got to create more pathways into the middle class for folks who are willing to work for it.  That’s what’s always made America great.  It’s not just how many billionaires we produce, but our ability to give everybody who works hard the chance to pursue their own measure of happiness.  That’s what America is all about.  (Applause.)

Now, there aren’t many things that are more important to that idea of economic mobility -– the idea that you can make it if you try –- than a good education.  All the students here know that.  That’s why you’re here.  (Applause.)  That’s why your families have made big sacrifices -– because we understand that in the face of greater and greater global competition, in a knowledge-based economy, a great education is more important than ever.

A higher education is the single best investment you can make in your future.  And I’m proud of all the students who are making that investment.  (Applause.)  And that’s not just me saying it.  Look, right now, the unemployment rate for Americans with at least a college degree is about one-third lower than the national average.  The incomes of folks who have at least a college degree are more than twice those of Americans without a high school diploma.  So more than ever before, some form of higher education is the surest path into the middle class.

But what I want to talk about today is what’s become a barrier and a burden for too many American families -– and that is the soaring cost of higher education.  (Applause.)

This is something that everybody knows you need — a college education.  On the other hand, college has never been more expensive.  Over the past three decades, the average tuition at a public four-year college has gone up by more than 250 percent — 250 percent.  Now, a typical family’s income has only gone up 16 percent.  So think about that — tuition has gone up 250 percent; income gone up 16 percent.  That’s a big gap.

Now, it’s true that a lot of universities have tried to provide financial aid and work-study programs.  And so not every student — in fact, most students are probably not paying the sticker price of tuition.  We understand that.  But what we also understand is that if it’s going up 250 [percent] and your incomes are only going up 16 [percent], at some point, families are having to make up some of the difference, or students are having to make up some of the difference with debt.

And meanwhile, over the past few years, states have been cutting back on their higher education budgets.  New York has done better than a lot of states, but the fact is that we’ve been spending more money on prisons, less money on college.  (Applause.)  And meanwhile, not enough colleges have been working to figure out how do we control costs, how do we cut back on costs.  So all this sticks it to students, sticks it to families, but also, taxpayers end up paying a bigger price.

The average student who borrows for college now graduates owing more than $26,000.  Some owe a lot more than that.  And I’ve heard from a lot of these young people who are frustrated that they’ve done everything they’re supposed to do –- got good grades in high school, applied to college, did well in school — but now they come out, they’ve got this crushing debt that’s crippling their sense of self-reliance and their dreams.  It becomes hard to start a family and buy a home if you’re servicing $1,000 worth of debt every month.  It becomes harder to start a business if you are servicing $1,000 worth of debt every month, right?  (Applause.)

And meanwhile, parents, you’re having to make sacrifices, which means you may be dipping into savings that should be going to your retirement to pay for your son or daughter’s — or to help pay for your son or daughter’s education.

So at a time when a higher education has never been more important or more expensive, too many students are facing a choice that they should never have to make:  Either they say no to college and pay the price for not getting a degree — and that’s a price that lasts a lifetime — or you do what it takes to go to college, but then you run the risk that you won’t be able to pay it off because you’ve got so much debt.

Now, that’s a choice we shouldn’t accept.  And, by the way, that’s a choice that previous generations didn’t have to accept. This is a country that early on made a commitment to put a good education within the reach of all who are willing to work for it. And we were ahead of the curve compared to other countries when it came to helping young people go to school.  (Applause.)

The folks in Buffalo understand this.  Mayor Brown was talking about the city of Buffalo and the great work that is being done through the program called “Say Yes,” to make sure that no child in Buffalo has to miss out on a college education because they can’t pay for it.  (Applause.)

But even though there’s a great program in this city, in a lot of places that program doesn’t exist.  But a generation ago, two generations ago, we made a bigger commitment.  This is the country that gave my grandfather the chance to go to college on the GI Bill after he came back from World War II.  (Applause.)  This is the country that helped my mother get through school while raising two kids.  (Applause.)  Michelle and I, we’re only where we are today because scholarships and student loans gave us a shot at a great education.  (Applause.)

And we know a little bit about trying to pay back student loans, too, because we didn’t come from a wealthy family.  So we each graduated from college and law school with a mountain of debt.  And even though we got good jobs, we barely finished paying it off just before I was elected to the U.S. Senate.

AUDIENCE:  Whew!

THE PRESIDENT:  Right?  I mean, I was in my 40s when we finished paying off our debt.  And we should have been saving for Malia and Sasha by that time.  But we were still paying off what we had gotten — and we were luckier because most of the debt was from law school.  Our undergraduate debt was not as great because tuition had not started shooting up as high.

So the bottom line is this — we’ve got a crisis in terms of college affordability and student debt.  And over the past four years, what we’ve tried to do is to take some steps to make college more affordable.  So we enacted historic reforms to the student loan system, so taxpayer dollars stop padding the pockets of big banks and instead help more kids afford college.  (Applause.)

Because what was happening was the old system, the student loan programs were going through banks; they didn’t have any risk because the federal government guaranteed the loans, but they were still taking billions of dollars out of the program.  We said, well, let’s just give the loans directly to the students and we can put more money to helping students.

Then we set up a consumer watchdog.  And that consumer watchdog is already helping students and families navigate the financial options that are out there to pay for college without getting ripped off by shady lenders.  (Applause.)  And we’re providing more tools and resources for students and families to try to finance college.  And if any of you are still trying to figure out how to finance college, check it out at StudentAid.gov.  StudentAid.gov.

Then, we took action to cap loan repayments at 10 percent of monthly income for many borrowers who are trying to responsibly manage their federal student loan debt.  (Applause.)  So overall, we’ve made college more affordable for millions of students and families through tax credits and grants and student loans that go farther than they did before.  And then, just a few weeks ago, Democrats and Republicans worked together to keep student loan rates from doubling.  (Applause.)  And that saves typical undergraduates more than $1,500 for this year’s loans.

So that’s all a good start, but it’s not enough.  The problem is, is that even if the federal government keeps on putting more and more money in the system, if the cost is going up by 250 percent, tax revenues aren’t going up 250 percent — and so some point, the government will run out of money, which means more and more costs are being loaded on to students and their families.

The system’s current trajectory is not sustainable.  And what that means is state legislatures are going to have to step up.  They can’t just keep cutting support for public colleges and universities.  (Applause.)  That’s just the truth.  Colleges are not going to be able to just keep on increasing tuition year after year, and then passing it on to students and families and taxpayers.  (Applause.)   Our economy can’t afford the trillion dollars in outstanding student loan debt, much of which may not get repaid because students don’t have the capacity to pay it.  We can’t price the middle class and everybody working to get into the middle class out of a college education.  We’re going to have to do things differently.  We can’t go about business as usual.

Because if we do, that will put our younger generation, our workers, our country at a competitive disadvantage for years.  Higher education is still the best ticket to upward mobility in America, and if we don’t do something about keeping it within reach, it will create problems for economic mobility for generations to come.  And that’s not acceptable.  (Applause.)

So whether we’re talking about a two-year program, a four-year program, a technical certificate, bottom line is higher education cannot be a luxury.  It’s an economic imperative:  Every family in America should be able to afford to get it.  (Applause.)

So that’s the problem.  Now, what are we going to do about it?  Today, I’m proposing major new reforms that will shake up the current system, create better incentives for colleges to do more with less, and deliver better value for students and their families.  (Applause.)

And some of these reforms will require action from Congress, so we’re going to have to work on that.  (Laughter.)  Some of these changes I can make on my own.  (Applause.)  We are going to have to — we’re going to be partnering with colleges to do more to keep costs down, and we’re going to work with states to make higher education a higher priority in their budgets.  (Applause.)

And one last thing — we’re going to have to ask more of students who are receiving federal aid, as well.  And I’ve got to tell you ahead of time, these reforms won’t be popular with everybody, especially those who are making out just fine under the current system.  But my main concern is not with those institutions; my main concern is the students those institutions are there to serve -– because this country is only going to be as strong as our next generation.  (Applause.)

And I have confidence that our country’s colleges and universities will step up — just like Chancellor Zimpher and the folks at SUNY are trying to step up — and lead the way to do the right thing for students.

So let me be specific.  My plan comes down to three main goals.  First, we’re going to start rating colleges not just by which college is the most selective, not just by which college is the most expensive, not just by which college has the nicest facilities — you can get all of that on the existing rating systems.  What we want to do is rate them on who’s offering the best value so students and taxpayers get a bigger bang for their buck.  (Applause.)

Number two, we’re going to jumpstart new competition between colleges –- not just on the field or on the court, but in terms of innovation that encourages affordability, and encourages student success, and doesn’t sacrifice educational quality.  (Applause.)  That’s going to be the second component of it.

And the third is, we’re going to make sure that if you have to take on debt to earn your college degree that you have ways to manage and afford it.  (Applause.)

So let me just talk about each of these briefly.

Our first priority is aimed at providing better value for students — making sure that families and taxpayers are getting what we pay for.  Today, I’m directing Arne Duncan, our Secretary of Education, to lead an effort to develop a new rating system for America’s colleges before the 2015 college year.  Right now, private rankings like U.S. News and World Report puts out each year their rankings, and it encourages a lot of colleges to focus on ways to — how do we game the numbers, and it actually rewards them, in some cases, for raising costs.  I think we should rate colleges based on opportunity.  Are they helping students from all kinds of backgrounds succeed — (applause) — and on outcomes, on their value to students and parents.

So that means metrics like:  How much debt does the average student leave with?  How easy it is to pay off?  How many students graduate on time?  How well do those graduates do in the workforce?  Because the answers will help parents and students figure out how much value a college truly offers.

There are schools out there who are terrific values.  But there are also schools out there that have higher default rates than graduation rates.  And taxpayers shouldn’t be subsidizing students to go to schools where the kids aren’t graduating.  That doesn’t do anybody any good.  (Applause.)

And our ratings will also measure how successful colleges are at enrolling and graduating students who are on Pell grants. And it will be my firm principle that our ratings have to be carefully designed to increase, not decrease, the opportunities for higher education for students who face economic or other disadvantages.  (Applause.)

So this is going to take a little time, but we think this can empower students and families to make good choices.  And it will give any college the chance to show that it’s making serious and consistent improvement.  So a college may not be where it needs to be right now on value, but they’ll have time to try to get better.

And we want all the stakeholders in higher education — students, parents, businesses, college administrators, professors — to work with Secretary Duncan on this process.  And over the next few months, he’s going to host a series of public forums around the country to make sure we get these measures right.  And then, over the next few years, we’re going to work with Congress to use those ratings to change how we allocate federal aid for colleges.  (Applause.)

We are going to deliver on a promise we made last year, which is colleges that keep their tuition down and are providing high-quality education are the ones that are going to see their taxpayer funding go up.  It is time to stop subsidizing schools that are not producing good results, and reward schools that deliver for American students and our future.  (Applause.)

And we’re also going to encourage states to follow the same principle.  Right now, most states fund colleges based on how many students they enroll, not based on how well those students do or even if they graduate.  Now, some states are trying a better approach.  You got Tennessee, Indiana, Ohio — they’re offering more funding to colleges that do a better job of preparing students for graduation and a job.  Michigan is rewarding schools that keep tuition increases low.  So they’re changing the incentive structure.

And I’m challenging all states to come up with new and innovative ways to fund their colleges in a way that drives better results.  (Applause.)

Now, for the young people here, I just want to say that just as we’re expecting more from our schools that get funding from taxpayers, we’re going to have to expect more from students who get subsidies and grants from taxpayers.  (Applause.)  So we’re going to make sure students who receive federal financial aid complete their courses before receiving grants for the next semester.  (Applause.)

We’ll make sure to build in flexibility so we’re not penalizing disadvantaged students, or students who are holding down jobs to pay for school.  Things happen.  But the bottom line is we need to make sure that if you’re getting financial aid you’re doing your part to make progress towards a degree.  And, by the way, that’s good for you, too, because if you take out debt and you don’t get that degree, you are not going to be able to pay off that debt and you’ll be in a bind.  (Applause.)

All right, second goal:  We want to encourage more —

AUDIENCE MEMBER:  We love you, Obama!

THE PRESIDENT:  (Laughter.)  Thank you.

The second thing we want to do is to encourage more colleges to embrace innovative new ways to prepare our students for a 21st century economy and maintain a high level of quality without breaking the bank.

So let me talk about some alternatives that are already out there.  Southern New Hampshire University gives course credit based on how well students master the material, not just on how many hours they spend in the classroom.  So the idea would be if you’re learning the material faster, you can finish faster, which means you pay less and you save money.  (Applause.)  The University of Wisconsin is getting ready to do the same thing.

You’ve got Central Missouri University — I went there, and they’ve partnered with local high schools and community colleges so that their students can show up at college and graduate in half the time because they’re already starting to get college credits while they’re in high school or while they’re in a two-year college, so by the time they get to a four-year college they’re saving money.  (Applause.)

Universities like Carnegie Mellon, Arizona State, they’re starting to show that online learning can help students master the same material in less time and often at lower cost.  Georgia Tech, which is a national leader in computer science, just announced it will begin offering an online master’s degree in computer science at a fraction of the cost of a traditional class, but it’s just as rigorous and it’s producing engineers who are just as good.

So a lot of other schools are experimenting with these ideas to keep tuition down.  They’ve got other ways to help students graduate in less time, at less cost, while still maintaining high quality.  The point is it’s possible.  And it’s time for more colleges to step up with even better ways to do it.  And we’re going to provide additional assistance to states and universities that are coming up with good ideas.

Third thing, even as we work to bring down costs for current and future students, we’ve got to offer students who already have debt the chance to actually repay it.  (Applause.)  Nobody wants to take on debt — especially after what we’ve seen and families have gone through during this financial crisis.  But taking on debt in order to earn a college education has always been viewed as something that will pay off over time.  We’ve got to make sure, though, that it’s manageable.

As I said before, even with good jobs, it took Michelle and me a long time to pay off our student loans — while we should have been saving for Malia and Sasha’s college educations, we were still paying off our own.  So we know how important it is to make sure debt is manageable, so that it doesn’t keep you from taking a job that you really care about, or getting married, or buying that first home.

There are some folks who have been talking out there recently about whether the federal student loan program should make or cost the government money.  Here’s the bottom line — government shouldn’t see student loans as a way to make money; it should be a way to help students.  (Applause.)

So we need to ask ourselves:  How much does a federal student loan cost students?  How can we help students manage those costs better?  Our national mission is not to profit off student loans; our national mission must be to profit off having the best-educated workforce in the world.  That should be our focus.  (Applause.)

So, as I mentioned a little bit earlier, two years ago, I capped loan repayments at 10 percent of a student’s post-college income.  We called it Pay-As-You-Earn.  And it, along with some other income-driven repayment plans, have helped more than 2.5 million students so far.

But there are two obstacles that are preventing more students from taking advantage of it.  One is that too many current and former students aren’t eligible, which means we’ve got to get Congress to open up the program for more students.  (Applause.)  And we’re going to be pushing them to do that.

The other obstacle is that a lot of students don’t even know they’re eligible for the program.  So starting this year, we’re going to launch a campaign to help more borrowers learn about their repayment options and we’ll help more student borrowers enroll in Pay-As-You-Earn.  So if you went to college, you took out debt, you want to be a teacher, and starting salary for a teacher is, let’s say, $35,000, well, only 10 percent of that amount is what your loan repayment is.  Now, if you’re making more money, you should be paying more back.  But that way, everybody has a chance to go to college; everybody has a chance to pursue their dreams.

And that program is already in place.  We want more students to take advantage of it.  We’re really going to be advertising it heavily.

Now, if we move forward on these three fronts –- increasing value, encouraging innovation, helping people responsibly manage their debt –- I guarantee you we will help more students afford college.  We’ll help more students graduate from college.  We’ll help more students get rid of that debt so they can a good start in their careers.  (Applause.)

But it’s going to take a lot of hard work.  The good news is, from what I hear, folks in Buffalo know something about hard work.  (Applause.)  Folks in America know something about hard work.  And we’ve come a long way together these past four years. We’re going to keep moving forward on this issue and on every other issue that’s going to help make sure that we continue to have the strongest, most thriving middle class in the world.  We’re going to keep pushing to build a better bargain for everybody in this country who works hard, and everybody who’s trying to get into that middle class.  (Applause.)

And we’re going to keep fighting to make sure that this remains a country where, if you work hard and study hard and are responsible, you are rewarded, so that no matter what you look like and where you come from, what your last name is, here in America you can make it if you try.  (Applause.)

Thank you very much, everybody.  God bless you.  God bless America.  (Applause.)

END
11:54 A.M. EDT

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