Remarks to the American Association of Community Colleges in Minneapolis, Minnesota

Weekly Compilation of Presidential Documents, May 1, 1995

I want to make some brief points today about what we are trying to achieve in this Congress and what we are trying to stop from being achieved in this Congress. And I want to ask for your help.

In the last 2 years, we had broad bipartisan support for the most substantial increased effort by the National Government to support education in a generation: big increases in Head Start; world-class standards for our schools and more flexibility for our teachers, our parents, our administrations, and our students to meet them; school-to-work programs so our young people who don't go on to 4-year colleges would have the opportunity to move into the workplace with the kind of training and skills that would give them jobs that would raise their incomes, not drive them down; tech-prep programs as a part of school to work. A lot of you are involved in the tech-prep issue, and it's something I know a lot about from my personal experience, enabling high school students to get work experience and to go straight to community colleges. We created AmeriCorps, our national service initiative. And more than 30 community colleges and this association are participating in AmeriCorps. We've got people doing everything from helping the elderly in Kentucky to tutoring kids in inner-city Chicago to helping with community policing in Rochester, New York, thanks to the community colleges. And I thank you very much for your endeavors.

Now, what should we do? Number one, do no harm. Don't undo what we just did. Number one, do no harm. Number two, yes, we need to reduce the deficit, but we should increase the Pell grant program as we have proposed, not reduce it, as some have proposed. Yes, we should cut the deficit, but one way to cut the deficit that is absolutely wrong is to start charging interest on student loans while the students are still in school.

There is an answer, you know, in education to the budget conundrum. Almost unbelievably there is an answer. It is our direct student loan program. We want to make it available for anyone who wants to finance assistance to college.

The student loan program, the direct loan program, started when I became President because I wanted to find a way to cut the cost of college loans, to cut the unbelievable bureaucratic paperwork headache, and to give students more options about how to repay loans, because I began to see students in our State who were dropping out of college because they were terrified that they would never be able to repay their loans, especially students who were going to do things that were important to our society but didn't pay a lot, students who wanted to be teachers, students who wanted to be nurses, students who wanted to be police officers, students who wanted to serve the public and knew that they would have big loans and modest salaries to repay them with. So we began to look around for ways to do this. And we settled on, and the Congress adopted, the direct college loan program.

When I took office, everybody in the country was complaining about the way the student loan program worked. Students complained that they couldn't get loans or if they did it took them too long and it was an absolute nightmare to fool with the paperwork. Colleges complained that the paperwork was driving them crazy. And everybody was worried about the nature of the repayment terms and the fact that there weren't enough options. There was also, I might add, an unconscionable amount of loan default, people who would not pay their loans back, costing the taxpayers $2.8 billion a year. And the banks didn't have much incentive to help, because they had a 90 percent guarantee. So by the time - if they brought some sort of action, they'd spend the 10 percent trying to collect the rest. So why not just take a check from the Government?