With student Stafford loan interest rates on the verge of doubling, President Barack Obama entered the University of Iowa’s Field House today and urged students to appeal to Congress to extend the rate freeze before it jumps to 6.8 percent in July.
Obama’s speech took place the day after Senate Democrats introduced a bill to freeze student interest rates at 3.4 percent. The bill would raise payroll taxes on some private corporations to cover the $5.9 billion price tag. Republicans have a similar bill, which will come up for a vote on Friday. However the Republican bill proposes paying for the rate freeze by cutting out funding for health care reform.
In his speech, Obama called the new bill “good news.” He added that “some Republican senators look like they might support it. And I’m ready to work with them to make it happen.”
However, Obama said House Republicans have “hinted that the only way they’d do it is if they cut things like aid for low-income students.”
Read more about Iowan student debt
Obama paused and scratched his head before adding, “We’re going to help some students by messing with other students. That’s not a good answer.”
The audience followed with a chorus of “No.”
A look to the past
The College Cost Reductions and Access Acts of 2007 created the current rate by establishing a yearly decrease in interest rates for undergraduate subsidized loans. The act passed the House with 215 votes from Democrats and 77 from Republicans. It passed the Senate with 79 votes. Obama was serving as a senator from Illinois at the time, but didn’t participate in the vote.#
|July 2006 – July 2008||6.8 percent|
|July 2008||6.0 percent|
|July 2009||5.6 percent|
|July 2010||4.5 percent|
|July 2011||3.4 percent|
Digging back into his past in the Illinois State Senate, Obama sponsored more than 800 bills, 62 of which dealt with education issues. When Obama was beginning in Chicago as a community organizer, he worked for the Developing Communities Project, which conducts programs to improve literacy, education, and job training among other issues.
During his time as a U.S. senator, Obama supported bills such as the Higher Education Opportunity Through Pell Grant Expansion Act, or the HOPE bill. The bill died, but it supported increasing the amount of Pell Grants, something Obama has continued to pursue as president.
In his Tuesday speech at the University of North Carolina at Chapel Hill, Obama noted that his administration has expanded the Pell Grants by cutting private banks out of the student loan system — a process in which the federal government took on most of the risk, but the banks received the profits.
“Over 10 years, that’s going to be $60 billion that’s going to students that wasn’t going to students before,” he said.
“This is personal”
Obama emphasized his own struggles with student debt.
“We’ve been in your shoes,” Obama said of himself and his wife Michelle. “We didn’t come from wealthy families. We needed loans and we needed grants to get our way through. And that meant that when Michelle and I graduated from college and law school, we had a mountain of debt. When we got married, we got poorer together.”
Eight years ago, Obama said, he finally finished paying off his debt.
“Think about that. I’m the president of the United States and it was only about eight years ago that we finished paying off our student loans”
He repeated the phrase “this is personal” throughout his speech. He also mentioned a roundtable he held with University of Iowa students.
“The stories they told me were so familiar,” he said. “One young man — single mom, she had lost her job. He was already about $30,000 in debt. He was only halfway through here at the University of Iowa.”
However, Obama assured the students that they are “making the right decision. Over the lifetime of earnings you will more than earn back the investment you’re making.” Earlier, Obama noted that Americans with a college degree have a much lower unemployment rate and have incomes twice as high as those without a high school diploma.
“But making it more affordable would sure help,” he added to a loud round of applause.
A party squabble?
Although Obama framed the issue as Democratic fight against Republican adversaries, Mitt Romney, the leading Republican candidate, has said he supports freezing rates.
House Speaker John Boehner (R- OH) turned the finger around and blamed the Democrats, tweeting: “Student loan rates set to double because a Democratic-controlled Congress voted to double them.” According to the link to the speaker’s blog, Boehner blames the Democrats for passing the 2007 bill with an expiration date that takes place during an election year.
Obama directly cited Boehner in his speech as accusing the administration of talking about student loans to avoid discussing the economy. But Obama argued that student loans and student debt are directly linked to the economy.
The average student who takes out loans owes about $25,000, Obama noted. In Iowa, that average is even higher. According to the Project on Student Debt, the average debt for seniors graduating in 2010 was $29,598, which ranks third in the nation.#
“It might mean putting off buying a first home or chasing that great startup idea that you’ve got…And when a big chunk of every paycheck goes towards loan debt, that’s not just tough on you, that’s not just tough on middle-class families — that’s not good for our economy.”
Obama focused on higher education as the key to improving the economy.
“You are the economy,” Obama said to the sea of black and gold before him. “That’s how we’re going to compete. Making sure our next generation earns the best education possible is exactly America’s business. Making sure that education is available to everybody and not just the few — that is America’s business. Our future depends on it.
(Lauren Mills is a senior journalism, English and Spanish major at the University of Iowa, and she is IowaWatch’s assistant editor)
An Opinionated Crowd
If you listened to the buzz around the University of Iowa Field House today, you might not know whether a reincarnation of Adolph Hitler was eminent or whether the “George Washington of black people” would soon emerge.
One woman called Obama a tyrant, while a man referred to him as the “best thing for our country and anyone else would be joke.”
That was the range of opinions that circulated among the crowd waiting for a visit from President Barack Obama Wednesday afternoon.
A group of University of Iowa students arrived at 1 a.m. to be the first in line when the doors opened at 10. In the interim, the line grew and snaked around two corners of the Field House.
A group of 15 minority students said they waited for nine hours out of excitement to see the first black president in person. Many of them said they fell asleep once they finally made it to the bleachers.
Obama excitement ran as high as Hawkeye fever. As soon as University staff started directing students through the gates, heads turned, conversation stirred and the excitement reached a new level.
Spectators unleashed their college creativity in various ways to kill time. At one point, someone ignited an “O-o-o Obama” chant, which lasted a full 15 seconds before someone yelled “Shut up,” which in turn sparked laughter. And then there was the old standby – the Wave.
People’s reasons for enduring the long wait varied as much as the means they used to pass the time.
“How many other chances am I going to get where I can see the president of the United States so close? Especially the first black president,” said Antoine Robinson, a sophomore biology and health promotion student at The University of Iowa.
Despite the overwhelming support for the president shown by thousands of spectators, not everyone welcomed Obama so warmly. By 10 a.m. about a dozen demonstrators had set up camp across the road from the field house.
By 11:30 the number of demonstrators had more than doubled. Some held signs that said, “Get goin’ back to Chicago,” “Nobama” and “Stop Obamunism.”
Nearby another student said “Go Obama.”
That set Rose Kindle off.
“Oh yeah! You’ll be sorry,” she countered. Kindle said she’s tired of old folks being treated poorly.
Several demonstrators argued that Obama’s stop in Iowa was purely a campaign strategy.
“I don’t believe for one minute that he cares about the young people,” said Linda Gerdener, who described herself as a baby boomer and an Iowa graduate.
Robinson had a different take. “I think in some ways everything a politician does is going towards a campaign effort, but I also feel like Obama really genuinely cares about the youthful generation,” he said.
Another demonstrator Paul Marconi, a junior accounting student at Iowa, said he’s fed up with student loans and doesn’t think Obama’s strategy to lower interest rates is enough. Marconi, of Illinois, will rack up about $90,000 in loans by the time he graduates Iowa.
“I’d just like to see the government step out of it,” he said.
Some of the protestors said Obama is not the answer to the student loan issues in America.
Gerdener said the real problem is that students aren’t even bothering to pay off their loans before graduation to avoid interest. She also said that students don’t appreciate their education because they aren’t paying for it anyway.
Despite her insult to the president and the demonstrators’ presence, the majority of people seemed to be pleased with Obama’s presentation as thousands of spectators crammed themselves into the tight confinement of the Field House walls.
Yu Ling Weng, a sophomore student at Iowa, also arrived early to ensure a good spot in the crowd. She wanted to learn more about what the president had to say about loans and college education because of her own financial situation.
“Right now my dad is supporting me, but we recently came across some family problems, and I’m concerned if I have to take out loans for the remainder of my college life.” Weng has two years left of college to pay for.
Obama connected on a more personal level with many of the students like Weng. He spoke about his own student loan debt that he worked hard to pay off and how he and his wife “became poor together.”
Robinson said he appreciated Obama’s personal experience with debt.
“Him personalizing it just helps take him off that pedestal. It helps you understand that this is a man that’s going through a lot of the same things as us,” said Robinson.
Mikkia Graves, a sophomore civil engineering student at Iowa, added, “A lot of the things he was saying was like things that I’ve heard coming from my parents. We’re all in the same place. We just have to work hard to get what we deserve.”