Three White House representatives hosted a media conference call yesterday to discuss President Barack Obama’s administration’s plans to help students manage loan debt and to make postsecondary education more affordable.
Secretary of Education Arne Duncan, Director of the White House Domestic Policy Council Melody Barnes and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau Raj Date spoke about how the Obama administration plans to make college more affordable by helping lower monthly student loan payments and consolidate loans.
Obama announced yesterday his plan to reduce student loan payments significantly each month by helping people consolidate loans. According to Duncan, doing so will help people afford daily and monthly necessities like rent and groceries.
“We have to educate our way to a better economy, and have to continue to make sure college is accessible and affordable, particularly for families that don’t have a lot of economic support coming from home, and first generation college goers,” said Duncan.
“For many who struggle to manage their student loan debt, including teachers, nurses, public defenders and others in lower-paying jobs, these proposed changes could reduce their payments by hundreds of dollars every single month,” said Barnes.
According to Barnes, approximately 5.8 million borrowers have both direct student loans and federal family education loans, which make it more likely to default.
Opponents of these efforts say Obama is trying to circumvent Congress in order to push his own agenda, continuing his “We Can’t Wait Campaign.” The campaign urges Congress to act on issues that Obama thinks “can’t wait” such as financial aid for housing and alleviating student loans. The Washington Post reported yesterday that Republicans like U.S. Rep. John Kline of Minnesota oppose Obama’s plan for student loans because they think it will only rack up more debt through borrowing and do nothing for student debt.
Date is a representative from the Consumer Financial Protection Bureau, an agency less than 100 days old. The agency’s first big initiative, according to Date, is helping students. One of the main issues he discussed during the conference call was that students are often uninformed about exactly they are signing up for when they apply for financial aid.
According to Date, financial aid award letters are often difficult for students to understand because they are “full of jargon.” He added that it is difficult for students to compare offers from different schools.
“We believe that student lending should be about making life better, not about making life worse,” said Date. “That is why we want to make sure that the cost and the risk of student loans are clear to students before they take on that debt.”
Date says students often cannot easily determine how much debt they are taking on and how much is too much. They intend to provide information that will help students differentiate between loans and scholarships, outline the total cost of attendance and clearly state how much they will have to pay after graduation.
“One of the reasons that we are encouraging students to consolidate their loans is because it will allow for a decrease in the percentage on their loan payments,” said Barnes.
Barnes says she hopes Congress will pay attention to all the students across the country talking about the issue of student debt. Barnes encourages Congress to address the needs of students.
“The steps we are taking today are not a substitute for the bold actions that we need to create jobs and grow the economy,” she said. “But they will make a difference, especially for our nation’s students and recent graduates and we can do it at no cost to the tax payer.”
Steffi Porter can be reached at [email protected]
