Obama Riles Up UNC Students, Saying Keeping Stafford Interest Rate Low Is An ‘Economic Imperative’
President Obama told students at the University of North Carolina-Chapel Hill on Tuesday that failing to keep the interest rate low on subsidized Stafford loans amounts to a “tax hike for more than 7 million students across America.”
“Now, everybody will give lip service to this,” the president said. “You’ll hear a lot of folks say, yes, education is important—it’s important. But it requires not just words but deeds. And the fact is, that since most of you were born, tuition and fees at America’s colleges have more than doubled. And that forces students like you to take out a lot more loans. There are fewer grants. You rack up more debt.”
Kicking off a two-day trip to three flagship universities—up next are visits to the University of Colorado-Boulder on Tuesday night and the University of Iowa on Wednesday—the president is doubling down on Congress, touting a new hashtag (#DontDoubleMyRate) as part of the effort.
It’s all part of an effort to ensure the interest rate on subsidized Stafford loans—which benefit 7.4 million students—don’t double from 3.4 percent to 6.8 percent this July. A cap on the rate expires on July 1 and, without Congressional action, the interest rate will “double overnight,” he said. For an average borrower, this would amount to an extra $1,000 in payments over the life of the loan.
In front of about 8,000 lively students (shouts of “Amen” dotted the speech), Obama criticized those in Congress who say they’ll only agree to keeping interest rates low if cuts to student aid are made elsewhere. Keeping college affordable, the president asserted, shouldn’t be a partisan issue.
“We’ll keep interest rates low if we take away aid form other students who need it? That doesn’t make sense,” he said.
He asked UNC students to join him in petitioning Congress, telling them to take to Twitter, Facebook, or email their members of Congress about the issue.
“Your voice matters. So stand up. Be heard. Be counted,” he said. “Tell them now is not the time to double interest rates on your student loans. Now is the time to double down on smart investments to build a strong and secure middle class.”
Obama also used the platform to ask Congress to extend the tuition-tax credit that benefits low- and middle-income Americans, secure funding for Pell Grants, and double the number of work-study jobs available to students over the next few years.
“College education is one of the best investments America can make for our future,” the president said. “This is important for all of us. We can’t price most Americans out of a college education. We can’t make higher education a luxury. It’s an economic imperative. Every American should be able to afford it.”
The “economic imperative” theme has become central to Obama’s push for affordable education. Earlier this year, the Consumer Financial Protection Bureau said student loan debt had surpassed credit card debt and now totals more than $1 trillion.
“When a big chunk of every paycheck goes towards loan debt, that’s not just tough on you, that’s not just tough for middle-class families, it’s not just tough on your parents—it’s painful for the economy, because that money is not going to help businesses grow,” he said. “I mean, think about the sooner you can start buying a house, that’s good for the housing industry. The sooner you can start up that business, that means you’re hiring some folks. That grows the economy.”
In a call with student journalists from across the country on Tuesday afternoon—just after taping an upcoming appearance on “Late Night with Jimmy Fallon” about the issue—Obama said keeping Stafford loan rates at 3.4 percent will be a key focus of his administration for the next few months.
“I’ve always believed that we should be doing everything we can to put education in reach for every single American student,” he said. “I want to talk to students right now about how we can make our education more affordable and what’s at stake if Congress doesn’t do something about it.”
Failing to invest in higher education, Obama said, is a serious mistake.
“That’s nothing more than cutting our future off at the knees.”
Brian Stewart is the Communications Director at Generation Progress. You can follow him on Twitter @brianstewart.