America is home to the best colleges and universities in the world — and increasing college attainment has never been more important to our economic competitiveness — yet tuition and fees have skyrocketed over the past decade, making it more difficult for American families to invest in a higher education for their future. Today’s college students borrow and rack up more debt than ever before. In 2010, graduates who took out loans left college owing an average of more than $26,000. Student loan debt has now surpassed credit card debt for the first time ever.
Our nation’s commitment to placing a good education within reach of all who are willing to work for it helped build a strong American middle class over the past several generations. In keeping this promise alive, President Obama has expanded federal support to help more students afford college, while calling for a shared responsibility in tackling rising college costs. President Obama’s efforts of reform in higher education funding have produced the largest investment in student aid since the G.I. Bill, while resulting in a more efficient, reliable, and effective system for students to help them afford college and manage debt:
The Administration’s “Pay as You Earn” plan expands income-based repayment to enable 1.6 million students to take advantage of a new option to cap repayment of student loans at 10 percent of monthly income — an option that student borrowers can begin to use at the end of this year. These changes will reduce the burden of student loans in a fiscally responsible way. Additionally, millions of borrowers are now eligible to consolidate Direct Loans and FFEL Loans and save up to half a percentage point on their interest rate.For more information: Everything you need to know about income-based repayment
President Obama established the American Opportunity Tax Credit in 2009 to assist families with the costs of college, providing up to $10,000 for four years of college tuition for families earning up to $180,000. Over 9.4 million students and families benefit from the American Opportunity Tax Credit each year.
Keeping Student Loan Interest Rates Low
In his 2012 State of the Union address, the President called on Congress to keep interest rates low for the 7.4 million borrowers who take out subsidized Federal student loans for this school year. With President Obama’s leadership, rates on new subsidized Stafford loans remained at 3.4 percent — instead of doubling to 6.8 percent — this past summer. This bold action saved students an average of $1,000 on the life of their loans, and President Obama has committed to keeping interest rates low for student loans moving forward.
In August, President Obama signed a bill that takes an important step in fulfilling our nation’s obligations to students. The bipartisan legislation cuts rates on all new loans this year and save a typical undergraduate student $1,500 over the life of those loans. Learn more: Fact Sheet on Bipartisan Student Loan Deal
US Department of Education – Federal Student Aid http://studentaid.ed.gov
FACT SHEET: The President and First Lady’s Call to Action on College Opportunity
January 16, 2014
The President believes he has a job to do, and every day he is fighting to create more opportunities for working and middle class Americans. And while he will continue to work with Democrats and Republicans in Congress to move our country forward, the President is committed to partnering with colleges and universities, business leaders, nonprofits and others to do everything he can to support more college opportunities for students across the country.
Today, in response to the President’s call to action, the President and First Lady are joining with leaders in higher education to announce over 100 new commitments to expand college opportunity. To help more students afford and graduate from college with the skills they need, the Administration has already taken action including doubling Federal investments in Pell Grants and college tax credits and reforming student loans. Last August, the President laid out an ambitious new agenda aimed at improving college value, removing barriers to innovation and competition, and ensuring that student debt remains affordable. As the Administration continues to push for changes that keep college affordable for all students and families, we can and must do more to get more low-income students prepared for college, enrolled in quality institutions, and graduating if we are to achieve our North Star goal of leading the world in the share of college graduates by 2020. Together, the President, the First Lady and these leaders in higher education are taking another step to help ensure that every child, rich or poor, has the opportunity for a quality college education so they can get ahead.
Over 100 New Commitments to Expand College Opportunity: The participants in today’s event were asked not simply to attend an event – but to commit to new action in one of the following areas crucial to college opportunity:
* Connecting more low-income students to the college that is right for them and ensuring more graduate
* Increasing the pool of students preparing for college through early interventions
* Leveling the playing field in college advising and SAT/ACT test preparation
* Strengthening remediation to help academically underprepared students progress through and complete college
Today, over 100 colleges and universities and 40 organizations are announcing new commitments to action to build on their existing efforts in this area. Together, these actions will serve hundreds of thousands of students across the country.