This past week, President Obama traveled to different universities across the country to push for college affordability. The president is trying to prevent Congress from doubling interest rates on federal student loans on July 1.
In 2007, Congress passed the College Cost Reduction and Access Act, which lowered the interest rate on federal subsidized Stafford student loans from 6.8 percent to 3.4 percent.
However, the act was only set to continue through 2012 and the deadline is quickly approaching for its extension.
Without the lowered interest rate, nearly 7.5 million students will owe, on average, an additional $1,000 in debt.
To promote renewal of the act, President Obama visited the University of North Carolina, University of Colorado Boulder and University of Iowa. In his remarks to these universities, the president emphasized the need to make higher education affordable to all Americans.
“Helping more of our young people afford college, that should be at the forefront of America’s agenda,” Obama said. “It shouldn’t be a Republican or a Democratic issue. This is an American issue.”
The Obama administration has already passed several reforms in regards to college affordability, including one extending Pell grants to three million more students and expanding the American opportunity tax credit for middle class families, worth up to $10,000, to help cover the cost of tuition.
The administration has also worked with states to make sure they are not cutting higher education funds and with college presidents to ensure costs are down and providing value, according to Cecilia Munoz, assistant to the president and director of the White House Domestic Policy Council.
“I’ve always believed that we should be doing everything we can to help out higher education within reach for every single American student — because the unemployment rate for Americans with at least a college degree is about half the national average,” Obama said. “And it’s never been more important. Unfortunately, it’s also never been more expensive.”
As of 2010, student debt exceeded credit debt in the U.S. The average student graduates with about $25,000 in debt.
While people with a college degree still earn twice as much as those who do not have a high school diploma, there is a concern that with the rise of interest rates, college students might choose to forego college to avoid the debt that comes with it.
“(Students struggling with debt) is something that we absolutely need to address as part of our economic health and well-being as a society to make sure we can compete in the global economy by making sure that we have the best educated and prepared work force in the country,” Munoz said.
Accomplishing this is a shared responsibility between the federal government, states, colleges, and universities.
“The federal government has a role to play and we are making sure that we are playing that role through Pell grants and tax credit,” Munoz said. “The states have a role to play here by making sure that they invest in higher education, and colleges and universities have a role to play here, too.”
This past February, President Obama met with state governors to discuss the issue of college affordability and the importance of working together.
The administration hopes extending the act will give them time to address the issue of college affordability long term, Munoz said.
“We hope to inspire a conversation in Congress around the whole higher education question, which will include a conversation about making sure that we address this permanently,” Munoz said.
Freezing the current interest rate will cost taxpayers an additional $6 billion. However, according to Munoz, they are seeking to do this in a way that is fully funded.
Despite the politically polarized Congress, the president will continue to push this effort until it is passed and creates a bipartisanship because he sees no alternatives.
“We wish we had administrative tools to do it, but, unfortunately, this requires legislative authority to keep the rates low, which is why we’re taking this debate to the Congress,” Munoz said.
Aaron Cook, a junior music performance and music technology major, agrees focusing on higher education is important.
“Looking at it from the perspective I have, I don’t think it “interest rates” should rise especially with the current economy,” he said. “Ever since President George W. Bush’s ‘No Child Left Behind Act,’ there has been a big push for bettering education, and increasing interest would make that harder.”
However, Katie Bisazza, a freshman animal poultry science major, believes if the money were going toward something beneficial or working toward reducing the debt, then raising interest rates would not be a bad idea.
“If I see (money from interest) going somewhere, then I’d be okay with it,” Bisazza said.
President Obama will continue to travel across the country until legislation is passed to keep interest rates low.
“We’ve got to build an economy where everybody is getting a fair shot, everybody is doing their fair share, everybody is playing by the same set of rules,” he said. “That’s ultimately how the middle class gets stronger. And that’s an economy that’s built to last,” Obama