At colleges and universities across America, students are heading into the classroom, many for the first time. You’re taking part in a journey that will not only determine your future, but the future of this country. We know, for example, that nearly eight in ten new jobs will require workforce training or higher education by the end of this decade. And we know that in a global economy, the nation that out-educates us today will out-compete us tomorrow. In the 21st century, America’s success depends on the education our students receive.
That’s why, soon after I took office, I proposed an ambitious goal: by 2020, America will once again have the highest proportion of college graduates in the world. And over the past year and a half, we’ve been putting in place policies to help us meet this goal.
First, we are making college more affordable. As students, you know why this matters. Over the past ten years, college costs have shot up faster than housing, transportation, and even health care costs. The amount student borrowers owe has risen almost 25 percent in just five years. This isn’t some abstract issue to me. Michelle and I had big loans to pay off when we graduated. I remember what that burden feels like. No one in America should be saddled with crushing debt simply because they sought an education. And no one should be denied a chance to make the most of their lives because they can’t afford it.
That’s why we fought so hard to win a battle that has been raging in Washington for years over how to administer student loans. Under the old system, taxpayers paid banks and financial companies billions of dollars in subsidies to act as middlemen – a deal that was very lucrative for them, but unnecessary and wasteful. And because these special interests were so powerful, this boondoggle survived for decades. But this year, we said, enough is enough. As a result, instead of handing over $60 billion in unwarranted subsidies to big banks, we’re redirecting that money to upgrade America’s community colleges and make college more affordable for nearly 8 million students and families.
We’re tripling the investment in college tax credits for middle class families. We’re raising the value of Pell Grants, and we’ll make sure they increase each year to better keep up with inflation. We’re making loan repayments more manageable for more than one million more students. Future borrowers can even choose an income-based payment plan so that you don’t have to pay more than 10 percent of your salary each month. And if you go into public service, and keep up with your payments, your leftover student debt will be forgiven after 10 years. As part of this effort, we’re simplifying financial aid forms, too, by eliminating dozens of unnecessary questions. I’d also point out: one way we’re helping young people afford college is by helping them to afford health insurance. Because of the new health care law, young adults can stay on their parents’ health plans until they are 26 years old.
Second, a college education needs to be more than affordable; it needs to prepare graduates for the jobs of the 21st century. Community colleges – undervalued assets in this country – are well-positioned to lead this effort. That’s why we’re upgrading these institutions by tying the skills taught in classrooms to the needs of local businesses in growing sectors of the economy.
The third part of our higher education strategy is making sure more students complete college. Over a third of America’s college students, and over half our minority students, don’t earn a degree, even after six years. That’s not just a waste of money; it’s an incredible waste of potential that holds our country back. We don’t just need to open the doors of college to more Americans; we need to ensure that students walk back out of those doors with a degree in their hands. Of course, that depends on students. You are responsible for your own success.
But there is more we can do to remove barriers to finishing college, especially for those earning a degree while working or raising a family. That’s why I’ve proposed a College Access and Completion Fund, to develop, implement, and evaluate new approaches to improving college success and completion, particularly for students from disadvantaged backgrounds. So we are making college more affordable, gearing the education you receive to the demands of a global economy, and taking steps to lift graduation rates. Because this is how we’ll retake the lead in producing college graduates. This is how we’ll help students like you to fulfill your dreams. And this is how we’ll ensure that America prospers in this new century, and that we harness the greatest source of our strength: the talents of our people.