student loan account

the president: thank you, everybody. thank you, everybody have a seat. welcome to the white house. and i want to thank andy forthe terrific introduction. and this is commencementseason, and it's always a hopeful and excitingtime, and i'll bet we might have some folks who justgraduated here today. raise your hands. let's see -- yes, we'vegot a couple of folks

who are feeling pretty good. (laughter) of course, once theglow wears off, this can be a stressful timefor millions of students. and they're askingthemselves, how on earth am i going to pay offall these student loans? and that's what we'rehere to talk about. and andy i think gave a vividexample of what's going through the minds of so many youngpeople who have the drive

and the energy and havesucceeded in everything that they do but becauseof family circumstances have found themselvesin 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 thesingle best investment that you can make inyourselves and your future, and we've got to make surethat investment pays off. and here's why: for51 months in a row,

our businesses havecreated 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 topare doing better than ever, average wages havebarely budged. and there are too manyamericans out there that are working harderand harder just to get by.

everything i do is aimed towardsreversing those trends that put a greater burden on the middleclass and are diminishing the number of ladders toget into the middle class, because the centraltenet of my presidency, partly because of the story ofmy life and michelle's life, is this is a country whereopportunity should be available for anybody -- the ideathat no matter who you are, what you look like, where youcome from, how you were raised, who you love, if you'rewilling to work hard,

if you're willing to liveup to your responsibilities, you can make it here in america. and in america, highereducation opens the doors of opportunity for all. and it doesn't have to be afour-year college education. we've got community colleges,we've got technical schools, but we know that somehigher education, some additional skills isgoing to be your surest path to the middle class.

the typical american with abachelor's degree or higher earns over $28,000 more peryear than somebody with just a high school education-- 28 grand a year. and right now, theunemployment rate for workers with a bachelor's degreeis about half of what it is for folks with justa high school education. so you know that thisis a smart investment. your parents know thisis a smart investment. that's why so many of them madesuch big sacrifices to make

sure that you could getinto college, and nagged you throughout yourhigh school years. here's the problem: at atime when higher education has never been moreimportant, it's also never been more expensive. over the last three decades,the average tuition at a public universityhas more than tripled. at the same time, thetypical family's income has gone up just 16 percent.

michelle and i both went tocollege because of loans and grants and thework that we did. but i'll be honest withyou -- now, i'm old, i've got to admit -- -- but when i got out ofschool, it took me about a year to pay off my entireundergraduate education. that was it. and i went to a privateschool; i didn't even go to a public school.

so as recently asthe '70s, the '80s, when you made acommitment to college, you weren't anticipating thatyou'd have this massive debt on the back end. now, when i went to law schoolit was a different story. but that made sense becausethe idea was if you got a professional degreelike a law degree, you would probably beable to pay it off. and so i didn't feel sorryfor myself or any lawyers

who took on law school debt. but compare that experiencejust half a generation, a generation ago to whatkids are going through now. these rising costs haveleft middle-class families feeling trapped. let's be honest:families at the top, they can easily savemore than enough money to pay for schoolout of pocket. families at the bottomface a lot of obstacles,

but they can turn tofederal programs designed to help them handle costs. but you've got a lot ofmiddle-class families who can't build up enough savings,don't qualify for support, feel like nobody islooking out for them. and as andy justdescribed vividly, heaven forbid that the equityin their home gets used up for some other familyemergency, or, as we saw in 2008, suddenly homevalues sink, and then people

feel like they're leftin the lurch. so i'm only here becausethis country gave me a chance through education. we are here today becausewe believe that in america, no hardworking youngperson should be priced out of a higher education. this country has always madea commitment to put a good education within the reachof 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 youngpeople 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 thegreatest middle class the world has ever known. grants helped my mother raisetwo kids by herself while

she got through school. and she didn't have$75,000 worth of debt, and she was raising twokids at the same time. neither michelle or icame from a lot of money, but with hard work, and helpfrom scholarships and student loans, we got to goto great schools. we did not have this kind ofburden that we're seeing, at least at theundergraduate stages. as i said, becauseof law school,

we only finished paying offour own student loans just 10 years ago. so we know what many of you aregoing through or look forward -- or don't look forward to. and we were doing it at thesame time -- we already had to start saving formalia and sasha's education. but this is why i feelso strongly about this. this is why i'mpassionate about it. that's why we took on a studentloan system that basically gave

away tens of billions oftaxpayer dollars to big banks. we said, let's cutout the middle man. banks should be makinga profit on what they do, but not off thebacks of students. we reformed it; more moneywent directly to students. we expanded grants forlow-income students through the pell grant program. we created a newtuition tax credit for middle-class families.

we offered millions of youngpeople the chance to cap their student loan payments at 10percent of their income -- that's what andywas referring to. michelle right now is workingwith students to help them "reach higher," and overcome theobstacles that stand between them and graduation. this is something weare deeply invested in. but as long as collegecosts keep soaring, we can't just keep throwingmoney at the problem.

we're going to have toinitiate reforms from the colleges themselves. states have to investmore in higher education. historically, the reason we hadsuch a great public education system, public higher educationsystem was states understood we will benefit if weinvest in higher education. and somewhere along theline, they started thinking, we've got to investmore in prisons than we do in higher education.

and part of the reason thattuition has been jacked up year after year afteryear is state legislators are not prioritizing this. they're passing thecosts onto taxpayers. it's not sustainable. so that's why i laid out a planto shake up our higher education system and encouragecolleges to finally bring down college costs. and i proposed new rules to makesure for-profit colleges keep

their promises and trainstudents with the skills for today's jobs withoutsaddling them with debt. too many of these for-profitcolleges -- some do a fine job, but many of them recruit kidsin, 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 needto get the job that allows them to service the debt. none of these fightshave been easy.

all of them have been worth it. you've got some outstandingmembers of congress right here who have been fightingright alongside us to make sure that we are givingyou a fair shake. and the good news is, more youngpeople are earning college degrees than ever before. and that's somethingwe should be proud of, and that's somethingwe should celebrate. but more of them aregraduating with debt.

despite everything we'redoing, we're still seeing too big a debt load ontoo many young people. a large majority of today'scollege seniors have taken out loans to pay for school. the average borrower at afour-year college owes nearly $30,000 by graduation day. americans now owe moreon student loans than they do on credit cards. and the outrage here is thatthey're just doing what

they've been toldthey're supposed to do. i can't tell you how manyletters i get from people who say i did everything i wassupposed to and now i'm finding myself in a situation wherei'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 therules, they shouldn't be punished for it. a young woman namedashley, in santa fe,

wrote me a lettera few months ago. and ashley wanted me toknow that she's young, she's ambitious, she's proudof the degree she earned. and she said, "i am the future"-- she put "am" in capital letters so that i'dknow she means business. and she told me thatbecause of her student loan debt, she's worried she'll neverbe 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'tafford to have one."

i wrote her back andsaid it's a little early in your 20s to give up. so i'm sure ashley wastrying to make a point, but it's a point that all ofus need to pay attention to. in america, no youngperson who works hard and plays by the rulesshould feel that way. now, i've made it clearthat i want to work with congress on this issue. unfortunately, a generationof young people can't

afford to wait forcongress to get going. the members of congress who arehere are working very hard and putting forward legislation totry to make this stuff happen, but they have not gotten someof the support that they need. in this year of action, whereveri've seen ways i can act on my own to expand opportunityto more americans, i have. and today, i'm going to takethree actions to help more young people pay offtheir student loan debt. number one, i'm directingour secretary of education,

arne duncan, to give moreamericans who are already making their loan payments a chanceto cap those payments at 10 percent of their income. we call it "pay as you earn." we know it works, because we'vealready offered it to millions of young people. it's saving folks likeandy hundreds of dollars potentially every month. it's giving graduates theopportunity to pursue the dreams

that inspired them to go toschool in the first place, and that's good for everybody. and we want more young peopleto start their own businesses. we want more young peoplebecoming teachers and nurses and social workers. we want young people to be in aposition to pursue their dreams. and we want more young peoplewho act responsibly to be able to manage their debt over time. so we're announcing steps thatwill open up "pay as you earn"

to nearly 5 millionmore americans. that's the first actionwe're taking today. the second action is torenegotiate contracts with private companies likesallie mae that service our student loans. and we're going to make itclear that these companies are in the business of helpingstudents, not just collecting payments, and they owe youngpeople the customer service, and support, and financialflexibility that they deserve.

that's number two. number three -- we're doing moreto help every borrower know all the options that are outthere, so that they can pick the one that's right for them. so we're going to work withthe teachers' associations, and the nurses' associations,with business groups; with the ymca, and non-profitsand companies like turbotax and h&r block. and tomorrow, i'm goingto do a student loan q&a

with tumblr to help spreadthe word -- you're laughing because you think, whatdoes he know about tumblr? but you will recallthat i have two teenage daughters so that i amhip to all these things. plus i have all thesetwenty-somethings who are working forme all the time. but to give even more studentborrowers the chance to save money requiresaction from congress. i'm going to be signingthis executive order.

it's going to makeprogress, but not enough. we need more. we've got to have congressto make some progress. now, the good newsis, as i said, there are some folks incongress who want to do it. there are folks here likejim clyburn, john tierney, who are helping leadthis fight in the house. we've got elizabeth warren,who's leading this fight in the senate.

elizabeth has written a billthat would let students refinance their loans attoday's lower interest rates, just like their parentscan refinance a mortgage. it pays for itself by closingloopholes that allow some millionaires to pay a lower taxrate 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 pauseout of my prepared text. you would think that if somebodylike me has done really

well in part because thecountry has invested in them, that they wouldn't mind atleast paying the same rate as a teacher or a nurse. there's not a goodeconomic argument for it, that they shouldpay a lower rate. it's just clout, that's all. so it's bad enough thatthat's already happening. it would be scandalous if weallowed those kinds of tax loopholes for the very, veryfortunate to survive while

students are having trouble justgetting started in their lives. so you've got a prettystraightforward bill here. and this week, congresswill vote on that bill. and i want americans to payattention to see where their lawmakers' priorities liehere: lower tax bills for millionaires, or lower studentloan bills for the middle class. this should be a no-brainer. you've got a group of far-rightrepublicans in congress who push this trickle-down economicplan, telling hard-working

students and families,"you're on your own." two years ago, republicans incongress nearly let student loan interest rates double for7 million young people. last year, they triedto strip protections from lower-income students. this year, house republicansvoted overwhelmingly to slash pell grants and make it harderfor 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 incongress seem to believe that it's just because -- that justbecause some of the young people behind me need some help, thatthey're not trying hard enough. they don't get it. maybe they need to talk to andy. these students worked hardto get where they are today. shanelle roberson --where is shanelle? shanelle is the first in herfamily to graduate from

a four-year college. (applause) shanelle is notasking for a handout, none of these folks are. they're working hard. they're working whilethey're going to school. they're doing exactly whatwe told them they should do. but they want a chance. if they do exactly whatthey're told they should do,

that they're not suddenlyloaded up where they've got so much debt thatthey can't buy a house, they can't think aboutstarting a family, they can't imagine startinga business on their own. i've been in politics longenough to hear plenty of people, from both parties, pay lipservice to the next generation, and then they abandonthem when it counts. and we, the voters,let it happen. this is something that shouldbe really straightforward,

just like the minimum wageshould be straightforward, just like equal pay for equalwork should be straightforward. and one of the things i wantall the voters out there to consider, particularlyparents who are struggling trying to figure out howam i going to pay my kid's college education, take alook and see who is it that's fighting for you and your kids,and who is it that's not. because if thereare no consequences, then this kind of irresponsiblebehavior continues on the part

of members of congress. so i ran for this officeto help more young people go to college, graduate,and pay off their debt. and we've made some reallygood progress despite the best efforts of some in congressto block that progress. think about how much more wecould do if they were not standing in the way. this week, they have a chance tohelp millions of young people. i hope they do.

you should let them know you arewatching 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 toobfuscate -- meaning confuse, rather than to clarifyand illuminate -- -- then you shouldcall them to account. and in the meantime,i'm going to take these actions today on behalf ofall these young people here, and every striving youngamerican who shares my belief

that this is a place where youcan still make it if you try. thank you, everybody. god bless you. god bless america.