“Higher education is the single most important investment you can make in your future,” President Barack Obama told the filled-to-the-rafters crowd at Carmichael Auditorium early Tuesday afternoon. “Making sure that students aren’t saddled with debt before they even get started is the best investment America can make in our future.”
Five years ago, Congress cut the student loan rate in half. In July, that measure expires, unless Congress acts to extend the rate cut.
The average college loan debt nationwide is about $25,000, Obama said. UNC’s average cumulative debt is substantially lower at $15,472. Doubling the interest rate would add about $1,000 a year to each student’s loan obligation.
“That’s a tax hike for students,” he said.
The president chose UNC as the site to affirm his commitment to making higher education affordable. UNC originated the Carolina Covenant, a national model for providing a debt-free education to students whose family income is no more than 200 percent of the federal poverty rate. Since the Carolina Covenant program began in 2003, more than 90 universities nationwide have used Carolina’s program as a model.
“The cost of college tuition has doubled since most of you were born,” Obama told the diverse crowd, most of whom were students. Young people saddled with debt as they leave college must delay buying a home, starting a business or having a family, he said. When he and Michelle Obama were first married and not long out of law school, he said, their monthly student loan payments were more than the mortgage payment on their condo.
“I’m the president of the United States,” he said, “and Michelle and I didn’t pay off our student loans until eight years ago.” He said he was paying off his student loans at the same time he was trying to save money for his daughters to go to college.
The push to extend the measure to keep student loan interest low faces strong resistance from some members of Congress. Some want to cut available loans to students in exchange for keeping the interest rates low. Obama said U.S. Rep. Virginia P. Foxx ’68, who also earned her master’s from UNC in college teaching in 1973, had told him that she had a low tolerance for students who graduate with debt because they had “opportunities dumped in their lap.”
Obama recapped his administration’s progress on student debt. He instituted banking reforms that put more of the student loan risk on banks and saving students billions in loan fees. He signed a law that students’ monthly education loan payment be no more than 10 percent of their monthly income. He organized the Consumer Financial Protection Bureau that gives greater transparency to the student loan process through its “Know Before You Owe” program.
Colleges that don’t keep tuition costs down will see their federal aid reduced. Obama advocated for doubling the number of work-study jobs. He urged states to make support for education a high priority, and he challenged the crowd to contact their representatives in Congress to advocate for extending the interest rate cut.
In today’s economy, especially, a college degree is the best predictor of success, he said. “A degree from UNC is the best tool you have.”
“Your hopes and dreams drive me every day. I believe in your future.”
The speech fired up Will Niver ’08, who didn’t realize that the president had only recently paid off his student loans. “He knows firsthand how huge an issue student loan debt is going to be for our generation,” Niver said. “He gets it. I’m going to call my Republican senator. I have a few of those numbers on speed-dial.”
Chung Lee ’11, a substitute teacher, took the day off to hear Obama speak. He will start dental school in August and said, “I wanted to hear the president’s perspective on student loans.”
Carlton Dawson ’10 took the day off from the law firm where he works to hear Obama. A Carolina Covenant Scholar, Dawson graduated UNC debt-free, but he hopes to start law school next year. He made many connections in the legal field by working at the law school through his Covenant Scholar job for four years.
Alli Hyers hopes to get her acceptance letter to UNC — in about eight years. She came to hear Obama with her grandmother, former UNC employee Nancy Tripoli, and is already concerned about a possible rise in student loan interest rates.
“I’m only 10 years old,” Hyers said, “and I understand why that’s a very bad idea.”
Obama lingered around Carmichael to greet a crowd of students before leaving for Memorial Hall to tape Tuesday night’s Late Night With Jimmy Fallon before an audience restricted to Carolina seniors.
— Nancy Oates