    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book I)]
    [January 9, 1997]
    [Pages 16-18]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on Receiving a Report on Student Loan Default Rates and an
    Exchange With Reporters
    January 9, 1997

        The President. Thank you very much, Fiona. And I want to thank all
    the young people for coming here and for representing the best in our
    country and the best of our future. I also want to thank Secretary Riley
    for this report and for the work that he and the good people at the
    Department of Education have done every day for the last 4 years.
        When I ran for this office in 1992, at every stop along the way, I
    always said one of the most important things for me to do in the next 4
    years was to open the doors of college education wider by passing a loan
    program that would allow people to pay their college loans back as a
    percentage of their income, to have more options to pay their college
    loans back so no young person need ever fear going to college because of
    the crushing burden of debt on them in the early years after they got
    out, but that at the same time, we had to have more responsibility by
    dramatically lowering the student default rate.
        I went to law school and college on scholarships and loans and jobs,
    and I felt very strongly that it ought to be easier for people to go but
    that it ought to be harder to evade your obligation to repay the debt.
    And we have worked very, very hard to achieve those objectives. And
    that's why we've worked hard to expand college loans and lower their
    costs through the direct loan program. I'm glad that Fiona is a direct-
    loan student. We've seen the results of that throughout the country, and
    we believe that when those loans start to be repaid, they will lower the
    default rate even more.
        We expanded Pell grants and work-study programs in the last session
    of Congress to their highest level in history. We had the biggest
    increase in Pell grants in 20 years, and we added 200,000 more work-
    study slots. AmeriCorps was created, and it lets young people,
    obviously, earn money for a college education by serving in their
    communities.
        And in addition to that, as this report points out, we have
    strengthened the basic bargain. There has been more opportunity, but
    there is more responsibility. The default rate on student loans that is
    being announced today is the lowest in the history of America. It has
    dropped 40 percent since I took office. It is now below 11 percent. We
    want it to go lower still, but we can be proud of the fact that more
    young people who go to college are showing that, along with everything
    else, they have learned the important lesson of their responsibility to
    pay the loan back. And that means savings of hundreds of millions of
    dollars to our taxpayers, savings which will make it easier for us to
    balance the budget and easier for us to invest more in education.
        We have done our part by placing tough sanctions on schools that
    didn't do their part to prevent defaults, and in some cases, we actually
    took away eligibility for Federal loan programs. When necessary, we have
    tracked down defaulters and made them pay. Frankly, a stronger economy
    has also helped to produce today's good news. More young people who get
    out of college can get good jobs and repay their loans more easily, and
    that's very, very important.
        But the bottomline is that this report shows that our strategy of
    opportunity and responsibility is working. It's working because of the
    steps that have been taken to improve student loans

    [[Page 17]]

    and strengthen the economy. It's working because of the changes that
    were made in the loan program by Congress a few years ago. And it's
    working because more and more young people are taking advantage of a
    college education and then taking the opportunity to be responsible in
    paying their loans back.
        Now, as we begin this second term, I just want to reiterate my
    commitment to ensuring that every person in this country has the tools
    that he or she needs to make the most of their own lives, that we open
    the doors of college education to everyone. The core of my second term
    efforts to build a bridge to the 21st century will be dramatic
    advancements in education. The fact is that some people who want to go
    to college still can't get there, so our first step should be to provide
    more opportunity. We can do that through the HOPE Scholarships tax cuts
    that I have proposed. They would allow Americans to deduct from their
    tax bill, dollar for dollar, the cost of the typical community college
    tuition for up to 2 years, to make the first 2 years of college as
    universal as a high school diploma is today. They would allow the
    typical family to deduct up to $10,000 a year from their taxes for the
    cost of any college tuition. They would allow a family--I mean more
    families, many more families to save through IRA's and then to withdraw
    from those IRA's penalty-free if the money is being used to finance a
    college education.
        Especially now that more and more students are taking responsibility
    for their own education, we simply have to do more to open the doors
    wider. The HOPE Scholarship tax cuts would make college affordable for
    every person in this country willing to work for it, especially when you
    couple that with the availability of the loans and the work-studies.
    America needs these tax cuts to help America pay for college, and I hope
    Congress will help us to pass them into law.
        Let me also point out one of our other proposals that I've had on
    the table in Congress for 4 years now, which I am determined to get
    passed in this next Congress, is the ``GI bill'' for America's workers.
    A lot of people in the work force need to go back to school. There are
    now scores of different training programs that we propose to consolidate
    and send a skills grant to people who lose their jobs or people who are
    dramatically unemployed and let them make the decision to use this
    skills grant in the same way, to finance a college education.
        And let me finally say that while we can make sure that everyone can
    go to college, it's also important that everyone be prepared to go. We
    have to set the highest standards for public education in this country
    so that highly trained teachers demand peak performance from students.
    We should require that students pass tests that actually test whether
    they learn what the standards say they're supposed to know before they
    go on from grade to grade. We should reward teachers who do well and
    make it possible for local schools to remove those who do not. We should
    expand public school choice and improve and expand on charter schools
    run by teachers and parents that survive only if they produce results.
    We should make sure every child can read independently by the third
    grade, and I hope that we'll have another 100,000 young people helping
    in that million-person brigade of volunteers we're going to need to
    teach our young people to read. And we should finish the job of
    connecting every classroom to the Internet by the year 2000.
        If every 8-year-old can read, every 12-year-old can log on to the
    Internet, and every 18-year-old can go to college, America will enter
    the 21st century with every person able to have the skills that he or
    she needs to succeed in building a good life.
        So let me say that these young people here--they're a shining
    example of opportunity and responsibility--give me the hope that we will
    succeed. And I thank you, Fiona, and I thank all the others and all of
    them like you all across America today who will be watching this and who
    will be building our future.
        Thank you, and thank you, Mr. Secretary.

    Legislative Agenda

        Q. What do you think is the chance of getting these through
    Congress?
        The President. Well, I think they'll be very good. You know, we've
    worked very hard on our budget, and our OMB Director, Frank Raines, has
    begun conversations with Members of Congress already. I have spoken,
    obviously, on many occasions with Senator Lott and Senator Daschle,
    Speaker Gingrich and Leader Gephardt. And if the atmosphere--I can now
    only add to what I've already said--if the atmosphere of this Congress
    reflects what happened in the last 2 months of the last Congress, I

    [[Page 18]]

    think the American people will get their balanced budget; they will get
    these education tax cuts; they will get the next step of welfare reform
    to create jobs for people who are going to be moving from welfare to
    work; and it will be a very, very good time. The atmosphere so far feels
    good to me, and if we just keep working on it, I think we can get there.
        Q. Mr. President, have you made all of your final budget decisions?
    And is there any possibility of your reopening any of those decisions,
    specifically on Medicare?
        The President. Well, let me answer you this way. I have completed
    sometime ago the work on the budget. We still have to work around the
    edges from time to time. It is a good budget; it is a credible budget. I
    also am pleased that the OMB and the Congressional Budget Office have
    been working together to try to narrow the gaps between them in all
    these assumptions they have for the budget. And I'm confident that we
    can produce one that will bring balance under either set of assumptions,
    and I intend to do that. And the budget will reflect the priorities I
    laid before the American people in the campaign and will be consistent
    with what I have said over the last 4 or 5 years about this.
        Now, I also expect there to be a negotiating process with the
    Congress, and I will work with them in good faith, as I have said all
    along. But I think this budget will show that I am making a clear effort
    to reach out to them, to meet them halfway, and to get this job done.
        Q. In what year will the budget you present in February actually
    reach a balanced budget?
        The President. In 2002, the same year we----
        Q. The same year.
        The President. ----all along.
        Q. Does that mean that on Medicare you are going to go for raising
    the premiums and so forth? And you spoke in generalities, but is there
    anything you can----
        The President. Well, it means I don't want to remove all the
    suspense from my budget presentation. [Laughter]
        Thank you very much.

    Note: The President spoke at 10:31 a.m. in the Oval Office at the White
    House. In his remarks, he referred to Fiona Rose, University of Michigan
    student who introduced the President.