By Secretary of Education Arne Duncan
Last month, I had the honor of giving the commencement address at Howard University. I was filled with hope and inspiration looking out at the faces of all those young people, often the first in their family to attend college.
Those students and their families worked hard, sacrificed and saved to go to Howard. And for many of them, getting a degree would not have been possible without the help of Pell Grants and low-interest federal student loans.
These students and parents understand that a post-secondary education is the ticket to economic success in America. But while it's never been more important to have a degree, a certificate or an industry-recognized credential -- it's also never been more expensive.
Since 1995, college costs across the country have increased almost five times faster than median household income. As a result, students and their families are taking on more and more debt. Borrowing to pay for college used to be the exception, now it's the rule.
About two-thirds of college graduates borrow to go to school, and on average they're graduating with more than $26,000 in debt. In an economy still recovering from the worst downturn since the Great Depression, getting a job is hard enough, but paying back those loans is daunting.
To make matters worse, a policy change is coming at the end of this month that will make getting out of debt more expensive for more than 7 million young Americans next year: Without congressional action, the interest rate on Stafford loans will double from 3.4 percent to 6.8 percent, starting July 1.
Based on the average loan amount, doubling the Stafford loan interest rate will add more than $1,000 in total costs for borrowers. For students who borrow heavily to go to college, it could cost even more. Only Congress can keep these interest rates from doubling. And yet Congress has so far failed to deliver.
While I appreciate that some congressional Republicans have recently indicated they're now willing to work with the administration to find a solution, the debate so far has been largely divided along party lines and made no progress.
Americans are tired of political fights in Washington. It's time to stop talking and start doing. People want Congress to put politics aside and come together to produce real results that make a difference. And you can count college students at the top of that list. I am optimistic that both parties can -- and should -- find common ground to reach a bipartisan compromise.
President Barack Obama has traveled to colleges and universities across the country, urging Congress do its part to keep college affordable by stopping student loan interest rates from doubling this July. With so many students struggling to both make ends meet and afford the skyrocketing price of a college degree, now is not the right time to heap more costs on them.
All of us share responsibility for making college affordable and keeping the middle-class dream alive. Parents need to be smart consumers, and students need to finish on time or even early.
Colleges and universities need to be efficient and productive in delivering educational value to students. Graduating students ready for success should be as important to professors as research and publishing. Institutions should ensure that keeping costs down does not take a back seat to the expensive amenities outside the classroom. Where it makes sense, they should offer lower-cost options such as online learning.
States must do their part to make higher education a higher priority in their budgets. Last year, 40 states cut higher education spending -- the single most significant factor in tuition increases.
The Obama administration is working everyday to do its part. But we need Congress to step up and help. Over the past two years, we've worked with Congress to dramatically boost Pell grant funding by passing the Recovery Act. We've also eliminated billions of dollars in wasteful taxpayer subsidies to banks, plowing the savings into aid for low-income college students.
We're helping students better manage their debt after graduation with programs like income-based repayment, loan consolidation and public service loan forgiveness. And we're proposing to double the number of work-study jobs and make the American Opportunity Tax Credit permanent, which would provide $2,500 annually for working families to pay for college. We're also calling for new incentives for states and institutions to keep college costs from escalating.
We took all of these steps because the president and I believe education is a public good. College should not be reserved only for those who can afford it. Investing in education is the best investment America can make to bolster its competitiveness in a knowledge-based, global economy. If we don't invest today, we will lose tomorrow.
Now, America can take another simple step forward and keep the interest rate on Stafford loans at 3.4 percent -- but only if Congress does its job and comes together around a fair and responsible way to pay for it.
In 2007, a Democratic-controlled Congress and a Republican president came together to lower interest rates on these loans because it was the right thing to do. That Congress did not put politics ahead of students and neither should today's. Let's do the right thing for America's students -- and for our nation's economy.