Obama Punts on Student Loans in State of the Union Address

Michael Lux Blog, News, Student Loans 0 Comments

This evening President Obama gave his Constitutionally mandated State of the Union Address.

Coming in at about 1:05, it was the second longest State of the Union for the Obama Presidency.

Of the entire State of the Union, President Obama said only the following about student loans:

Five years ago, we set out to change the odds for all our kids. We worked with lenders to reform student loans, and today, more young people are earning college degrees than ever before. Race to the Top, with the help of governors from both parties, has helped states raise expectations and performance. Teachers and principals in schools from Tennessee to Washington, D.C. are making big strides in preparing students with skills for the new economy – problem solving, critical thinking, science, technology, engineering, and math. Some of this change is hard. It requires everything from more challenging curriculums and more demanding parents to better support for teachers and new ways to measure how well our kids think, not how well they can fill in a bubble on a test. But it’s worth it – and it’s working.

…We’re working to redesign high schools and partner them with colleges and employers that offer the real-world education and hands-on training that can lead directly to a job and career. We’re shaking up our system of higher education to give parents more information, and colleges more incentives to offer better value, so that no middle-class kid is priced out of a college education. We’re offering millions the opportunity to cap their monthly student loan payments to ten percent of their income, and I want to work with Congress to see how we can help even more Americans who feel trapped by student loan debt. And I’m reaching out to some of America’s leading foundations and corporations on a new initiative to help more young men of color facing tough odds stay on track and reach their full potential.

While the President has every right to trumpet the difference that the Pay As You Earn (PAYE) program and its 10% cap is making, there is still much to do.  While PAYE does help millions, millions more are not able to participate because they held federal student loans prior to 2007.  Additional millions are getting crushed by private loans, and there seems to be little effort to help these people.

Student loans getting mentioned in the State of the Union is certainly a great way to bring attention to the issue, but expecting the President and Congress “to see how we can help even more Americans who feel trapped by student loan debt” seems like a long shot.

Student debt affects industries ranging from housing to auto, it alters peoples family planning and it delays major life milestones.  It is both a social and an economic issue.  Unfortunately, there were no substantive proposals put forth by the President tonight.  Until there is, things are unlikely to change for people like Colleen and Jess.