The Clinton-Gore Administration: Cutting Student Loan Defaults and Opening the Doors of College for All Americans (10/2/00)

The Clinton-Gore Administration: Cutting Student Loan Defaults and Opening the Doors of College for All Americans (10/2/00)

Today, President Clinton will announce that the national student loan default rate is 6.9 percent—the lowest rate ever and one-third the 22.4 percent rate when he took office. Lower default rates and better loan collections have saved taxpayers more than $14 billion since the start of this Administration. In addition, other student loan reforms have saved taxpayers $4 billion and students $9 billion, for a total of $27 billion in savings since 1993. President Clinton will call on Congress to expand access to college by enacting his proposals to create the College Opportunity Tax Cut and to expand the GEAR UP program for at-risk youth. Finally, he will insist on investing in the rest of America's education priorities to improve our schools and prepare more children for college: modernized schools, smaller class sizes, a qualified teacher in every classroom, more after-school learning opportunities, and accountability for fixing failing schools.

THE LOWEST STUDENT LOAN DEFAULT RATE EVER. President Clinton inherited the highest student loan default rate ever, 22.4 percent. Under this Administration the rate has declined for eight straight years to 8.8 percent last year and 6.9 percent this year. (About one-half of this year's 1.9 percentage-point decrease is due to implementation of a 1998 law that changed the definition of a default from 180 days without a payment to 270 days without a payment.) Even as the default rate decreased, collections on defaulted loans have tripled under this Administration, from $1 billion in 1993 to $4 billion last year.

EIGHT YEARS OF STUDENT LOAN REFORM. Today's announcement builds on eight years of effort to reform the student loan program and create more opportunities for college. Students have saved $9 billion: $5 billion through lower interest rates and $4 billion through lower fees. Taxpayers have saved $18 billion: $7 billion by preventing defaults, $7 billion by better collecting on loans that do default, and $4 billion by making loans through the cheaper Direct Student Loan program. The Clinton-Gore record includes:

CALLING ON CONGRESS TO INVEST IN AMERICA'S EDUCATION PRIORITIES. In February, the Clinton-Gore Administration sent Congress a balanced and fiscally responsible budget that makes investments in key education initiatives. As of today, the Republican Congress has completed only two of 13 spending bills and is now neglecting America's priorities and loading spending bills with election-year, earmarked projects for special interests. The Republican budget provides:

Today, the President will again urge Congress to fully enact his education budget proposals by investing more in our schools and demanding more from them to ensure our children receive the high-quality education they deserve.

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