President Obama Pleads to Keep Student Loan Rates Low

The president slams Republican proposal to double student loan interest rates.
16:58 | 05/31/13

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Transcript for President Obama Pleads to Keep Student Loan Rates Low
This is a special report from ABC news. However -- anti Hernandez in New York with this ABC news digital special reports. Not in session for most colleges but the worry -- -- does not going away here is President Obama addressed the issue where I've. Remarkable young people from all across the country. It inspires me it makes me feel good. Those -- -- -- put on suits and ties and shall for the White House first thing. Friday morning may not feel the same -- but I appreciate all of you being here. You cleaned up very well. And these students and graduates are here to talk about something that matters to millions of young people and their families and that's the cost of college education. Because this isn't just critical for their futures but it's also critical for America's futures. Over the past four and a half years we've been fighting our way back from. A financial crisis and an incredibly punishing recession the worst since the great depression and it cost millions Americans their jobs. And their homes. The sense of security that. -- -- spent their lives building up. The good news is today our businesses have created nearly seven million new jobs over the past 38 months. 500000 of those jobs are in manufacturing. We're producing more of our own energy were consuming less energy and we're importing less from other countries. The housing market is coming back the stock market has rebounded. Our deficits. Are shrinking. At the fastest pace in fifty years. People's retirement savings are growing again. The rise of health care cost are slowing the American auto industry is back. So. We're seeing progress. And the economy started pick ups -- the group gears -- start to turn again and we're getting some traction. But the thing is the way we measure our progress is a country. Is not just where the stock market is. It's not just how well the folks of the -- -- It's not just about aggregate economic numbers. It's about how. How much progress. Ordinary families -- make. Our we creating ladders of opportunity for everybody -- won't work hard. Are we creating. Not only a growing economy but also the engine that. Is critical to long lasting sustained economic growth and that is a rising thriving middle class. That's our focus that's what we've got to be concerned about every single day that's our north star. And that means there -- three questions we have to ask ourselves -- -- -- number one how do we make America a magnet. For good jobs. In this competitive 21 century economy number two. How we make sure that our workers are of the skills and education they need to do those jobs. A number three -- we make sure those jobs actually pay. A decent wage. We're salaries to the people. Can. Save for retirement. Send their kids to college. Those are the questions we've got to be asking ourselves are singled -- So we're here today to talk about that second question how do we make sure. Our workers firm the skills and education they need. To do the jobs the companies are hiring for right now and are gonna keep hiring for in the future. We know that the surest path to the middle class. Is some form of higher education. Four year degree -- community college. Degree an advanced degree. You're gonna need more than just a high school education. To succeed in this economy. And the young people all here today they get that. -- working through college. May be -- just graduated. And earning their degree isn't just the best investment the -- make for their future it's the best. Investments. That they can make in America's future. But like a lot of young people. All across the country these students have had to take on more and more and more debt. To pay for this and that's. Since most of today's college students were born tuition and fees at public universities have more than double. And these days the average student who takes out loans to pay for four years of college. Graduates owing more than 26000. Dollars. How many people are on track here for. -- 6000 dollars. And that doesn't. That doesn't just hold back our young graduates hold back our entire middle class because Americans now -- more on. Our student loans that we do on our credit cards and those payments can last for years even decades. Which means the young people. Are putting off buying their first car or their first house. The things we grow our economy and -- new jobs. And I've said this before I know this firsthand Michelle and I we did not finish paying off our student loans until about nine years ago. And our student loans cost more than our mortgage. Right when we want us. Start saving for Sasha and Malia is college education we're still paying off. Our own college education. And where we're lucky. We we had more resources than -- So we cannot price the middle class. Or folks were -- to work hard to get into the middle class out of a college education we can't keep saddling young people would more and more and more debt. Just as their starting out -- what. Good news is over the past four years. My administration -- don't want to address this working when members of congress we've expanded student aid. We've reformed the student loan system we've saved tens of billions of taxpayer dollars -- we're just going to big banks and make sure that. The money went to help -- more young people afford college. We made it easier to pay back those loans by passing a law that says -- only have to pay 10% of your monthly income -- your student. Federal student loans once you graduate -- important emphasized by the like of lot of your peers -- young people on notice under existing law. We passed. You never have to pay more than 10% -- -- and come in paying back your federal student loans. Which means if you wanna be a teacher -- You -- to go into a profession that does not pay a lot of money gives you a lot of satisfaction you are still capable of doing that. And and and supporting yourself. We unveiled a new college scorecard gives parents and students to clear concise information. That you need to shop around for school with the best value for you. And I've made it clear that those colleges that don't do enough to keep college costs -- should get less taxpayer support. -- -- doing what we can't but here's the thing if congress doesn't act by July 1. Federal student loan rates are set to double. That means -- -- average student with these loans will rack up an additional 1000 dollars in debt. That's like thousand dollar tax. I assume most of you cannot afford that anybody here -- -- -- that. Now. Now this sounds like deja Vu all over again that's because of -- we went through this last summer. -- -- -- -- One is hot. I don't think we did this -- outside. But we went through this and eventually congress -- all the parents and young people who said don't double my right. And because folks made their voices heard congress acted to keep interest rates low but they only did for year and that year's almost up. So the -- is simple we've got to make sure that federal student loan rates don't double on July 1. Now the House of Representatives has already passed a student loan bill and I'm glad that they took action but. Unfortunately -- bill does not meet that test it fails to lock in. Low rates for students next year. That's not Smart. Eliminate safe -- for lower income families that's not fair. It could actually cost a freshman starting school this fall moral over the next four years -- if we did nothing at all and -- -- interest rates double on July 1 so. The house bill isn't Smart and it's not fair. I'm glad the houses paying attention to it -- -- into in the right way. So I'm asking young people to get involved to make your voices heard once again. Last year you convinced a 186 Republicans in the house and 24 Republicans in the senate to work -- Democrats to keep student loan rates well. You made some of them bipartisan happen in this town that is. -- the powerful fact. You guys were able to get. Democrats and Republicans to vote for something that was important. So this year if it looks like -- represent. Representatives have changed their minds. You're gonna have to call him up again or email them again or tweak them again and asked them what happened what changed. You're still take an obvious moments. You're still facing challenges. Remind them that were people who help one another. -- education because it benefits all of us during the civil war Lincoln had the foresight to set up a system of land grant colleges. In the end of World War II we set up the GI bill. So the people like my grandfather could come back from war and get an education all of these things created the greatest middle class honor. My mom a single mom was able. Get the support that she needed to loans and grants even while she was also working and raising two kids. To get -- degrees. I'm only here Michelle's. Only brought over there on the -- when. Because we got great educations we can come from privilege. And we want to make sure that the next generation. As those same opportunities. Because that has been good for the country as a whole it's up to us now to carry for that tradition. Higher education cannot be a -- -- for a privileged few it is economic necessity that every family should be able to afford. Every young person would dreams and ambitions should be able to access and now's not the time for us to turn back. On young. To you. And the generation that's come behind. And that we work together group generate more jobs and educate more kids and open up new opportunities for our body -- won't work. And and want to push through those doors of opportunity. America. Can't be stopped. But -- put my my faith -- you let's work together let's get this done by July 1 thank your -- got mustard. -- An Obama making his case. To -- we knew what bill that would keep interest rates are -- on student loans for college. Students -- gonna bring an ABC news senior Washington correspondent Jeff sell me now to talk about. The president's statement. And -- Jack -- there you got. The president that wants to keep interest rates low up for college loans in the house last week actually passed a bill very similar to the president but the president now just saying. He doesn't like that -- doesn't include some safeguards that he wants put in how our part -- the president congress at this point -- Quite a ways apart at this point but. And in fact the White House has threatened to -- that bill if it would become law. But the president is right -- one -- he said at least the house is doing something that's more than they can really say for the senate Democrats there's been a virtual silence in this senate on a new type of legislation or new piece of legislation. Tom Harkin who's the head of this -- senate committee looking into this he's proposing simply to extend. The current plan for two more years to keep these student rates. Loans locked in at 3.4 percent for two more years basically kicking the can down the road. Until they you know ten. Resolve this or later always difficult going into what would be 2016. A presidential. Campaign you're so really the next month ahead here is there's going to be very nice thing to see if -- can come to some type of agreement. If not. The 3.4 points. A percent becomes six point 8% of students -- loans and everyone pats are going to double. -- Leno that there was an extension last year any chance of a long term solution or -- really looking at this point at that short term extension you mention of possibly two years. Well it just depends yes. If both sides Republicans and Democrats can work out a deal. Me this is something that out in the country is and it affects everyone it affects families it affects you know a lot of people so. I think what the president what the White House is trying to do here today is trying to drop people's attention to -- urging those students have to go out and call their senators call the representatives I think at some points over the next a month probably at the end of June in the always wait -- the last minute they will come to some type of agreement but. Washington the easiest thing to do is just simply extend what's already there so I wouldn't be surprised. If that happens that it's really not sustainable I -- everyone agrees that he's a student loan rates at some point have to be the -- to be a market. As opposed to just an arbitrary percentage that is set by congress. That's what's interesting here both sides do agree they can't remain this -- The president Obama's hope for the interest rate is a little lower than Republicans at this point. Mean it is and wanting that as existing in the Republican -- -- -- like one of those adjustable rate mortgages that you have on your house. That is load now but it could go up year by year by year that's one thing that the white -- -- believes is unfair the president has said it would be unfair to a low income families but. Mean there has to be sort of a more of a compromise on this going towards I think this is one of those the cases that it's really. I'm hard to pre judge how it's going to work it. It's congress receives pressure from. Constituents from -- from students out. In the country they could really come to some type of agreement over the next month so it'll be one of the things only one of the things playing out in a month of June here in Washington. Interesting that president mentioned he and First Lady Michelle Obama just finished paying their own student loans only nine years ago. Is this something it really resonates with the American public the issue of interest rates for college loans. -- he hopes it does and I but remember him first. Talking about this some eight years ago. -- -- only reason he did it was his book after 2004 became a best seller and he suddenly basically overnight. Became a millionaire this was not money that they were expecting he was a law professor. I'm mrs. Obama was working as an attorney for the city of Chicago and that Chicago hospitals not making a ton of money so I remember that very clearly in 2005. When he said that they finally had paid off their loans I'm not sure much -- residents are not because. I'm he used to be like most Americans that now he's certainly not he's a multimillionaire because of the books that he's written. Another thing so I thinks he can sort of understand. What students were going through but I think the sympathy factors probably fallen off year by year as he's made more money. Now the numbers those staggering the average amount of student debt and people -- -- 8000 dollars. Quickly surpassing credit card -- in this nation. Right and it's more than some people will make in their first a year are almost as much as -- make him -- first year -- existing. Saying no I thought the president started out this. For his event today. Talking about the economy the economy is really getting better and that is true but that is really going to be be a legacy of his term if the economy gets better. But certainly that's how he was trying to frame this event today. All right well Jeff felony thank you so much for joining us and bringing your perspective to the conversation. -- you right you've been watching an ABC news. Digital special report you can read up. Another proposal is an -- hasn't. What comes of the student loan debate right here at abcnews.com. This has been an ABC news digital special report -- -- Hernandez in New York. This has been a special report from ABC news.

This transcript has been automatically generated and may not be 100% accurate.

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