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Clinton unveils programs to ease college loan costs
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by James Gerstenzang
CHICAGO — Declaring a college education “more important than it’s ever been,” President Clinton unveiled two measures this month that are intended to make higher education more affordable by easing loan repayment costs and by forgiving loans to college graduates who teach in lower-income communities.
Among the United States’ unmet needs, Clinton said in a speech at DePaul University, “helping people go to college is No. 1.”
“We have to provide all Americans access to opportunity, and that means access to college,” he said.
The nation should set a goal, he said, of making sure that no one “stays out of higher education, or drops out of higher education, because of the cost.”
The program to provide teachers for lower-income areas — which face severe problems recruiting and retaining teachers, particularly those who have studied in college the subjects they are teaching — implements legislation passed two years ago.
It would forgive up to $5,000 in student loans for those who teach in needy schools for five consecutive years. At least one of the years in the classroom must have begun after Sept 1998. The U.S. Department of Education estimates that, through the year 2003, 25,000 teachers would be forgiven loans totaling $122 million. The program would take effect next July 1.
“They’ll be paying it back by teaching our kids,” Clinton said.
Under the second program, students and parents who hold direct student loans are being granted an immediate rebate on their interest equal to 1.5 percent of the loan, a payment that would affect more than 1.7 million students beginning in the coming academic year, the administration estimated.
To obtain the benefit, the students and parents must make the first 12 payments on time. The estimated savings on a $10,000 loan would be $150.
The program would also lower by 0.8 percent the interest rate for students who consolidate their loans in the direct student loan program, saving them an estimated $500 on $10,000 in loans.
Some 400,000 students are expected to take advantage of this, beginning with the fiscal year that starts Oct 1.
Clinton said the direct student loan program, a centerpiece in the administration’s effort to help students consolidate loans, had seen default rates on student loans drop from 22 percent when he took office to 9 percent now.
James Gerstenzang is a reporter for the Los Angeles Times. Article reprinted with permission.
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