Clinton touts reduction in student loan defaults

WASHINGTON (CNN) -- President Clinton touted a more than two-thirds reduction in the national student loan default rate Monday, while criticizing Congress for "pushing a budget" that "fails to guarantee investments in building or modernizing classrooms."

"When I took office, the default rate was 22.4 percent. Today, it is 6.9 percent," the president said.

He said this is the lowest default rate in the student loan program, and that it was achieved while tripling the number of student loans given each year.

The president said the reduction in student loan defaults has saved taxpayers $18 billion since 1993.

Clinton said the challenge government faced was finding a way for more people to go to college and do a better job of repaying their student loans. Since 1993, he said, the United States has more than doubled its investment in student aid.

"We've increased Pell Grants; expanded work-study slots from 700,000 to a million; created AmeriCorps, which has given more than 150,000 young people a chance to earn money for college while serving in communities; created education IRAs; the $1,500 Hope Scholarship Tax Credit for the first two years of college and then a lifelong learning credit for the junior and seniors years and for graduate schools," the president said.

To lower the number of students defaulting on loans, he said the Department of Education took a number of steps, including eliminating from the federal program more than 800 schools with consistently high default rates. In addition, more flexible repayment schedules were offered and the cost of loans was slashed to make them easier to pay.

"A typical $10,000 student loan today costs $1,300 less in fees and interest costs than it did eight years ago," Clinton said.

He said students also were borrowing less because of an increase in grants and work study aid and a stronger economy.

Clinton said two-thirds of students are now going to college, an increase of 10 percent "over the last few years." He said that number was important to him because he "never could have gotten through college and law school without loans and grants and jobs. And, I wanted everybody else to have those opportunities, as well."

The president said Congress has failed to follow through on bipartisan commitments to education. He said the current budget "shortchanges" investments in after school programs and efforts to improve teacher quality and fails to give middle class families deductions they need to send their children to college.

"More Americans will make more money, including already wealthy Americans, by having an educated work force in this country than by anything we can do in giving specialized tax cuts, and we ought to do it and do it now," he said.