Home > News, Policy > Obama Talks About Student Loans on MTV

Obama Talks About Student Loans on MTV

Today, MTV will air a program, taped on Saturday, in which they sat down with Senator Obama and asked him questions sent to them by viewers (they offered McCain the same opportunity, but he declined).  Obama talked about a wide variety of issues from gay marriage to civil liberties, but two of the questions directly addressed college affordability and student loan repayment:

Sway: The first question is from joi0924, and she’s from San Antonio: “The young people today cannot afford to go to college because of the cost of tuition. What are your plans as our next president when it comes to making it easier for young people to attend college?”

Obama: Look, this I can relate to. I went to college having to take out student loans, went to law school having to take out student loans. Michelle took out student loans. When we got married, I think together our total loan payments every month was more than our mortgage when we bought a house, and that lasted for about 10 years. And I meet students — I think the average student is taking out $25,000 to $30,000. That’s a huge burden, especially in a time when wages and income are not going up. So here is what we want to do: increase the Pell Grant program, eliminate banks as middlemen from the direct loan program — they’re taking out billions of dollars in profits — take that money, apply that to increasing the number of loans that are out there and reducing the rates, and then what I want to do is provide a $4,000 tuition credit for every student, every year, in exchange for national service. If they participate in Peace Corps, working in their community in some fashion, obviously joining the military. We are going to make sure that they can afford their college tuition. And in certain areas, like teaching, where we really need teachers, especially in math and science, and nursing, where we really need nurses, we will potentially provide them with even more than that in order to get the high-quality teachers and nurses that we really need.

Sway: OK, and that sounds great for those that want to attend college. What about those who are already in college, say for example we have Sev88. He is from Buffalo. His question is: “I am in my junior year of college. I am very worried about paying back my student loans. I have heard your plans for making college more affordable, but what are you going to do for the graduates that are already tens of thousands of dollars in student-loan debt?”

Obama: We may try to see if we can set up some programs to see if we can consolidate some of these loans. There is only so much we will be able to do going backwards. What we can focus on is going forward. I think there are a lot of students out there who have already paid off their loans and they may not be happy with it. They might not mind getting some of their money back too. What we want to do is just make sure that each student who is currently in school — and by the way, this isn’t just four-year colleges and universities. My attitude is, if young people are going back, going for two years at the community-college level for technical training of some sort, they are returning to school after having worked for a while, all of that is part of creating a knowledge-based work force that is going to be the key to our competitiveness long-term. This is not just good for young people, it’s good for the economy as a whole.

Sway: What are some of the programs you said for people that have already incurred the debt?

Obama: As I said, what we are looking at potentially is being able to consolidate some of the loans, and if they are part of a broader pool, we may be able to lower interest rates on the debt that they already owe. But the key is going to be going forward, making sure that young people in the future are able to afford to go to college.

I have to say, his answers regarding those of us who are already in debt do not look promising, especially this line: “There is only so much we will be able to do going backwards.”  I suspect that Obama would be slightly more open to, say, revamping the bankruptcy law than McCain, but he doesn’t bring it up, and there’s really no way to know.  I really wish McCain would have been interviewed as well, but it’s a little late for that now.

  1. Bob
    February 19, 2009 at 9:34 am

    As far as I can tell, Obama’s idea of forgiveness is to make you work for the government. He calls this “volunteering”. What is the difference in working an extra 10-15-20 hours a week at a part-time job to work it of and having to work (excuse me, volunteer) to work in under-serviced communities? I guess the difference is that with the current state of the economy finding that extra job may be difficult.

    My point is that “working it off” is NO SOLUTION! If someone is already working 45-50 hours a week with no life because they have no money left over, adding another 10 hours of work does not seem like relief to me.

    Obama needs to fully reinstate the ability to discharge student loans in bankruptcy. If someone qualifies for chapter 7, that means they qualify to eliminate all students loans. If a person qualifies for chapter 13, that means they qualify to restructure the student loans.

    Student loan borrowers should have the same consumer protections as all other consumer debt. In addition, any change in bankruptcy laws should be retroactive. That way people who have already filed do not get screwed out of relief. They should be able to go back to the courts, file a simple piece of paper and include their student loans. That relief should not be based on current income, but the income at the time of filing. This is only fair.

    People who graduated in an era when student loans were dischargeable in bankruptcy and did so were able to go on in life and raise families, buy cars, buy houses etc. So they contributed to the economy in that way. Today, many people (like myself) can’t ever hope to buy a house. It would be immoral to bring a child into this world based on my finances and the best I can hope for is to drive a car less than 10 years old. Let me go back and include my student loans in my bankruptcy!

    Let me enjoy the same right that others before have enjoyed. And, Mr. Obama, do not put hoops in the way like, well you need to have paid your loans for 5 years straight etc etc…because the student loan people, like Sallie Mae, play games. If they know you can’t pay they automatically put a deferral on it, thus eliminating the minimum time frame criteria and in essence making it so one never qualifies.

    It should be as simple as if you can file bankruptcy you can include student loans. PERIOD!

    THAT IS THE SOLUTION! Not some work it off program that creates a free source of labor to the government. Would you be in favor of a plan that said, well you can’t file bankruptcy on your credit cards, but you can “volunteer” to work at Citibank an extra 15 hours a week and “work it off” OF COURSE NOT!


  1. November 5, 2008 at 6:00 am

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