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Obama to UNLV crowd: Student loan legislation a ‘no-brainer’

Obama at UNLV

Paul Takahashi

President Barack Obama makes a campaign-style stump speech at UNLV’s Cox Pavilion on Thursday, June 7, 2012. Obama made a two-hour pit stop in Las Vegas to urge Congress not to raise student loan interest rates.

Updated Thursday, June 7, 2012 | 3:39 p.m.

Obama Speaks at UNLV: June 7, 2012

President Obama speaks to a crowd of supporters at the Cox Pavilion at UNLV on Thursday, June 7, 2012. Launch slideshow »

Welcomed to the stage at UNLV with chants of "four more years," President Barack Obama made a brief stop to town Thursday to urge Congress to halt student loan interest rates from doubling in July.

The interest rate hike would be equivalent to a $1,000 "tax" on 7.4 million students nationally, including about 8,000 UNLV students, Obama said.

“This is a no-brainer,” Obama told more than 2,000 attendees inside UNLV’s Cox Pavilion. “I’m telling Congress, get this done.”

Spurring Congress to action was a theme throughout Obama’s speech, which touched on several topics, including the economy and jobs.

The president said the nation’s economy was improving but admitted it was a hard path that would take time to turn around completely.

He called on elected leaders to take action.

“Congress should pass a bill, like I’ve asked them to do, to help states like Nevada ... put people back into jobs,” he said.

Obama, pulling a page from Harry Truman’s presidential campaign playbook, chastised a do-nothing Congress.

“You’re not sitting around doing nothing,” Obama told the audience. “You should expect the same from your elected representatives.”

But the main theme of the day was student loan interest rates, which White House spokesman Jay Carney insisted before the speech was “not a phony issue.”

"You know, in today’s economy, higher education can’t be a luxury," Obama said. "It’s an economic necessity. Everybody should be able to afford it."

Six years ago, House Democrats voted to temporarily halve interest rates – from 6.8 percent to 3.4 percent – for low- and middle-income students who receive subsidized Stafford college loans. On July 1, the interest rate is set to revert to 6.8 percent.

While Democrats and Republicans agree current interest rates should be extended, they haven’t been able to agree on how to bridge the $5.8 billion cost.

Democrats want to tax high earners to foot the bill. Republicans want to take the money from Obama’s signature health care reform law.

The political gridlock over student loan interest rates comes as national student loan debt recently topped $1 trillion, outpacing credit card debt among U.S. consumers. About two-thirds of undergraduate students borrow money to pay for college, and they rack up an average debt of more than $26,000, according to the Department of Education.

The heated student loan debate – which started in April – also has become a divisive issue in the middle of an election year when the votes of college students and their financially strapped parents are seemingly up for grabs.

Nevada is seen as a key swing state for Obama and the presumptive Republican presidential nominee Mitt Romney. Obama won the state in 2008, carried in part by the youth vote. Among Republicans in the 2012 GOP caucuses, Romney won Nevada.

Although Obama’s speech Thursday was billed as an official presidential trip, Obama has been criticized for taking trips to college campuses in various battleground states to attack Republicans for failing to act on legislation to hold down student loan interest rates. Republicans retort that Obama should focus on the economy instead.

“Young Americans have born the brunt of President Obama’s broken promises and failed policies," said Mason Harrison, Romney's campaign spokesman in a press release. "Governor Romney has the plan and proven track record to do what young voters need most: get our economy back on track and provide them with good jobs.”

During his half-hour-long speech Thursday – which touched on a number of topics, from veterans benefits to underwater homes to clean energy – Obama lauded his administration’s efforts to cut federal college loan repayments as the loan default rate has risen.

In 2009, Obama instituted an income-based repayment plan that forgives remaining federal student debt for college graduates who pay 15 percent of their income for 25 years. The same loan forgiveness would apply to public sector employees after 10 years. Obama has said he would drop the cap to 10 percent by the end of the year.

Obama also touted his administration’s announcement earlier this week to provide incoming college freshmen with a “shopping guide” for financial aid packages – starting next year.

The easy-to-understand factsheet would detail how much one year of college would cost after grants and scholarships are taken into account and the estimated monthly payments of federal college loans a student would likely pay upon graduation.

It’s a transparent and clear way for students to compare college costs amid confusing financial aid packages, Obama said. These measures will help make college more affordable for more Americans, especially low-income students, he added.

Although this consumer-friendly measure isn’t mandatory, 10 colleges and universities have already signed off on the financial "know before you owe" factsheets, including state university systems in New York, Massachusetts, Maryland and Texas.

The Nevada System of Higher Education should have a conversation about using a similar factsheet for its seven institutions, said Regent Cedric Crear, although he said he was hesitant to adopt it immediately.

“Sounds like a good idea, but the devil’s in the details,” he said. “It’s definitely a discussion the board should have.”

Romney – who released a white paper on education last month – has made similar proposals to drive down the cost of higher education. The former Massachusetts governor said he would reward universities for cutting college costs and simplifying financial aid.

In his education plan – titled “A Chance for Every Child” – Romney specifically mentions Nevada’s skyrocketing college costs, pointing to a December 2011 Sun article on the mounting cost of tuition at UNLV.

Tuition rates at UNLV have increased by 73 percent since 2007, outpacing the rate of inflation. The most recent tuition increase – 8 percent for undergraduates – goes into effect this fall.

Romney has attributed the confluence of skyrocketing tuition, mounting student debt and a lackluster job market to the economic recession, which he argued has been exacerbated under Obama’s tenure. Nevada continues to have the highest unemployment, foreclosure and bankruptcy rate in the nation.

Since the recession started in 2007, the number of UNLV students applying for financial aid has doubled. About 70 percent of UNLV students receive financial aid and 80 percent work, according to the university. The average UNLV student graduates with $18,000 in debt.

UNLV senior David Foshee, 21, stood in front of the Thomas and Mack Center early Thursday morning with a group of protesters holding signs that read “NObama” and “We can’t afford 4 more years.”

The biology major and member of UNLV’s College Republicans said he did not criticize the president for visiting Southern Nevada to campaign but said he was worried about Obama’s economic policies.

“We’re concerned about deficit spending and jobs and where our country is going,” Foshee said. “A lot of my friends have graduated and they can’t find jobs.”

Foshee said he planned to attend graduate school and expected to take on more student loans. He currently has $25,000 in loans.

“I don’t understand why (the loan interest rate reduction) wasn’t made permanent,” Foshee said. “If (Congress) really cared about students, they would have made it permanent.”

Las Vegas resident Mike Pritchard, 68, said he thought Obama has “done an excellent job with the situation he’s been given.” The self-described “strong Democrat” said he planned to campaign on behalf of Obama in the coming months.

The issue of student loan debt however was troubling, Prichard said. His daughter – a UNLV professor – was able to avoid $100,000 in student debt because of scholarships, he said.

“The cost of a four-year college degree is pretty ridiculous,” Prichard said. “What’s going on in Congress right now is terrible and unconscionable.”

Air Force One, with Obama in tow, took off from McCarran International Airport at 1:54 p.m., less than two hours after the plane's touchdown at 12:11 p.m.

Thursday’s visit was Obama’s third this year to Las Vegas, and his 10th during his presidency. Earlier he spoke about clean energy and the foreclosure crisis in Las Vegas.

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