President Obama and Secretary of Education Arne Duncan Discuss College Affordability

Uploaded by whitehouse on 04.05.2012

The President: Do you know what you want to study?
Student: I'm going into tech for general engineering.
The President: We need engineers, man.
Student: I also like the (inaudible) program down there.
The President: That's great. That's great. And how about you?
Student: I want to study business, kind of go into the entrepreneurship,
business path.
The President: Oh nice.
You want to start something?
Student: Yeah. Definitely.
The President: Do you have any idea?
Student: I have a few ideas running around but
nothing specific yet.
The President: Well, we don't want to tell anybody.
Somebody might steal your idea.
So what I'm going to be talking today is obviously financing
college educations.
And I tell this story about how both Michelle and I,
we had to rely on student loans and grants and scholarships to
get through law school.
And we still had a huge amount of debt, you know,
after we graduated.
It paid off.
It's a great investment.
But obviously, we're pretty sympathetic to the challenges
that families go through in terms of financing.
And so what we -- I just want to get a sense.
All of you are going to be taking out Stafford Loans.
And two things I wanted to get a sense of.
Number one, I'm assuming that a doubling of the interest rate is
not helpful to you.
But feel free to talk about that.
I also wanted to get a sense of how it was to apply for
them because one of the things Arne and I and others in the
administration have talked about is how do you simplify
the process just to make it a little bit easier for people?
Because I know, and based on your chuckle,
it sounds like that that's something that we need to do.
Anybody want to start?
Secretary Duncan: How was the financial aid form itself?
Was that scary? Was it easy?
Was it hard?
Student: Pretty easy.
It was kind of like filling out a college application.
So that made it really easy.
FAFSA did it all for you.
The President: Well, good.
Secretary Duncan: That's what I like to hear.
Let me check.
Other folks fill out the FAFSA?
Student: It was pretty easy.
Secretary Duncan: It used to be really really tough.
And we worked with the IRS to simplify that.
I was scared to partner with the IRS.
But they did a great, great job.
And the form itself used to be a barrier to going on.
What was your sense on it?
Student: I did it in my college summit class,
so my teacher helped me with it.
The President: That's good.
Secretary Duncan: How was it?
Student: It was easy.
The President: So parents, how are you feeling about this whole
college cost thing?
Parent: Well, Brendan's my third one in school right now.
And I have one more that will be coming up.
So I'll have four.
The President: So you're a pro.
Parent: Yes. So we go through that every year.
The President: And how about you?
Do you have other kids you got to be thinking about?
Parent: Yes. I have one.
She's at a community college now.
And so then she's going to go on to the four-year university.
But for Amyra (phonetic), we're just going straight to
the four-year university.
And the cost is a lot more than community college.
So we're looking at, you know, all our options, grants,
scholarships, and definitely, you know, the Stafford loan too.
The President: Is it going to be important?
Parent: Yes.
The President: So a big chunk of the payment?
Parent: Yes.
The President: How about you?
Parent: Rayna's (phonetic) my first one going to college.
I have two more, but they're small right now,
one in third grade and my last one is going to pre-k.
The President: Okay. So you got things spaced out a little bit.
That's good.
You know, there are two things that we're focused on.
One is obviously keeping loan rates low.
The second thing though is to actually try to lower college
costs itself.
And you know, we've met with colleges and universities.
The inflation rate on college has actually gone up faster than
healthcare which is pretty hard to do.
Secretary Duncan: Right.
The President: And some of it is not actually the fault of the university.
If it's a state school, the state legislatures across the
country have been cutting back on their support for public
colleges and universities.
And the only way these colleges, a lot of times,
can make it up is by raising tuition.
They've got higher healthcare costs they have to deal with.
But some of it is, you know, I think a lack of creativity in
terms of thinking about how do you keep the costs down.
All of you guys, when you get to school,
you're going to have to think about making sure that you're
not loading up yourselves with a lot of debt unnecessarily,
you know.
Everybody here going to be living in dorms?
Student: Yeah.
The President: And eating Ramen Noodles?
But you know, I think you guys are in a good position because
in addition to being able to take out student loans and
having parents who are obviously interested and engaged in the
process, what we're trying to do is,
through a variety of channels, provide more information to
students so that they can plan ahead about what their
debt loads might be when they graduate.
And that's something that, when we were going to school,
we didn't really have a good idea of.
And a lot of kids ended up being surprised.
Secretary Duncan: Knowing the four-year costs, knowing the loan repayments.
We're trying to do some things to reduce loan repayments to
the back end, things called Income Based Repayment, IBRs,
you can take a look at.
But help at the front-end, know what your costs are,
and more transparency and help in the back end.
So we're trying to do all those things.
So programs that push states to invest and push colleges
to be reasonable.
These are tough times, and don't get carried away.
A lot of colleges are doing it well.
Some aren't.
Some have challenges.
The President: But overall, it sounds like you guys are all set.
I'm excited for you.