View Header


                     Office of the Press Secretary
                         (Carbondale, Illinois)
For Immediate Release                                 September 11, 1995    
                        REMARKS BY THE PRESIDENT
                              Pulliam Hall             
                      Southern Illinois University
                          Carbondale, Illinois                               

10:51 A.M. CDT

THE PRESIDENT: Is everybody in? For the members of the press corps that came in with me, as you know, I have been doing these roundtable discussions with students and faculty members and others in colleges around the country. And this is the kickoff of the back-to-school week we're doing this year to emphasize the choices that have to be made in Washington in the next 60 days that will affect education. And so I came here to Southern Illinois University.

And one of the big issues is what's going to happen to the student loan program, and particularly, the Direct Loan Program which our administration started. So I thought that we should start by having Pam Britton, who is in charge of financial aid here at SIU, talk a little bit about how it works -- the Direct Loan Program -- and what you're doing here.

So, Pam, why don't you lead it off.

MS. BRITTON: I'd like to welcome you to Southern Illinois University at Carbondale. We're very pleased that you are here and meeting with this excellent group of students that we've gathered together for you from our regional campuses. We are going to deal with serious issues and serious consequences related to student aid, but I hope that you and the students will take some time to enjoy the heartland and see our beautiful scenery and enjoy our southern hospitality.

I think the students would like to tell you their name and their institution if that would be agreeable. And we could go ahead and have them introduce themselves, starting with Allison.

(Students introduce themselves.)

MS. BRITTON: You students are among the most fortunate in the country today to be able to have this hearing with the President. I am sure they will eloquently tell you about their personal stories. As I've talked with them in the past few days, I've learned that they have not always been so fortunate as they are today, and that financial aid means much to them as far as educational pursuits are and their future are concerned.

I'd like to tell them just that I have a financial aid story. I was federal work study student and a national defense student loan recipient in the 1960s. And at this point in time, I am paying taxes that are well more than what I earned in the first year of teaching, and I'm glad to do that. I feel that what I give back will be going to these students to help the future of the country, and I'm pleased to do that. I'm not sure that's the case in Congress or with some of our people across the country. And I hope they will be able to relate to you and to help to create awareness throughout the country about how important student aid.

It's very important to SIU. Our students receive $115 million in financial aid per year. They are a very needy population here. We have over 7,000 Pell Grant recipients which are the very neediest of our undergraduate students. And we have been very pleased with the federal support that has been provided to our students, but we have been most pleased this past semester with the implementation of the Direct Loan Program. It has been remarkably successful for us.

Prior to the first day of school, we had already processed $11 million in direct loans for our students for fall semester. We were up to date in processing. Students were able to get their award notices within days after their applications were complete. Our processing was up 15 percent from the prior year. And our short-term loans were down 31 percent from last year as a result of our students having the funds that they need. We were very pleased with the process, and we would like to see direct loans continue.

We are concerned that that is at risk with Congress, and we want the country to know that direct loans work very well here at SIU. And the financial aid office staff here at SIU will be wearing these T-shirts when they see your address, and we'd like to give that to you. They truly are smiling. This year there were no lines in the financial aid office and virtually no lines in the bursar's office. And in years past, that was not the case. So we thank you for the Direct Loan Program. We want it to stay.

THE PRESIDENT: Thank you. Let me explain -- how many of you come from schools that have the Direct Loan Program? You know the old Guaranteed Student Loan Program basically gave banks a 90-percent guarantee if they made a student loan to a student and the student didn't repay. And they got a handsome commission and fee on it. Under the Direct Loan Program, the government makes the loan directly through a government institution like a lot of the other government mortgage institutions. And what we found is that, number one, as Pam said, the loans are going out much faster -- much, much faster. There is less paperwork for the college administrators, less paperwork for the students. If the students get the loans on time, then they don't have to go borrow money, what you talked about, short-term loans.

In addition to that, believe it or not, they are less expensive because the fee doesn't get paid. So the government actually spends less money on it. And, best of all, for students that have to borrow a lot of money, unlike the old Guaranteed Student Loan Program, there are four different repayment options, including an option to pay the money back as a percentage of your income; so that, for example, if you decide to take a job that you find very rewarding but doesn't pay very much money and you have a big loan, you still can't ever go broke doing it. There's no incentive ever to drop out of school because you can pay the money back as a percentage of your income.

This was a major part of my administration's economic proposal in 1993, and we got it through. And ever since then it's been under assault by the bankers who made the money under the old loan program. It is true that they're worse off. I mean, they lost a lot of business. But the students are better off; the administrators are better off; the Federal Treasury's better off; and the country's better off because now we're going to have more people borrowing money and going to school. But the bankers aren't better off, and they've persuaded the House of Representatives to get rid of the program, go back to the old system. And now it's under assault in the Senate; they'll be voting this week.

So one of the reasons I wanted to come here is to try to galvanize people like you all across the country to ask our Congress to stand up to the special interests that want their money back, and to keep this program, which is working better for you.

I mean, ultimately, the purpose of the loan program is to educate more young people, to make loans -- and not-so-young people going back to college, because a lot of people my age are now going back, and they can't do it without student aid.

So I want to hear all of your stories, but Pam told me she had sort of a testimonial -- the experience that SIU has had with the Direct Loan Program, and I must say, I hear that everywhere.

I met a young couple in Florida the other day who were both graduated from medical school with $140,000 in student loans between them, and they told us that if it weren't for the Direct Loan Program, which permits them to repay as a percentage of their income -- because, see, they're all going to become interns; they won't make a lot of money when they get right out of medical school. They said they would be spending over half of their monthly income repaying their loans. They wouldn't have enough money, literally, for food and rent but for the Direct Loan Program.

So, Pam, why don't you take over now. Let's go around and listen to the other students.

MS. BRITTON: Okay. One of our student participants would like to begin by speaking to direct loan issues at her institution. Noemi?

MS. RIVERA-MORALES: Mr. President, Ms. Britton, fellow students, good morning. Buenos dias.

THE PRESIDENT: Buenos dias.

MS. RIVERA-MORALES: I want to tell you about my experience as a recipient of a federal student loan. My first loan was in 1989. I was an applicant for the fall semester. I was on time -- and this was under Pell. And even though I applied on time, I didn't receive the first disbursement until January. And I didn't get kicked out of the school because the financial aid counselor and the school were merciful. And this shows that the program does not run smooth, and that it's not such a successful partnership between public and private sectors.

Now I'm borrowing my current loan under the direct lending program at Indiana University, which is brand new. We just started in the fall. And although I turned in my promissory note the Wednesday before Labor Day, my loan proceeds were in my home mail -- no, a refund check in my home mail the Wednesday after Labor Day.

THE PRESIDENT: So it was one week?

STUDENT: One week. With a holiday in between.

THE PRESIDENT: With a holiday in between. So much for government inefficiency.

STUDENT: Compared with Pell, direct lending is less bureaucratic, saves taxpayers money and it works better for students. Direct lending simplifies the application process, as you said. It allows for less paperwork for fewer parties involved and for lower rate of errors. Direct lending makes it easier and faster to identify and to correct loan problems, thus simplifying the correction process. The application itself is just the initial step.

A borrower can find out the status of a loan from a single source and can choose more flexible repayment options, as you mentioned. A borrower can get the proceeds much faster. I worked at -- student financial office and $16 million were disbursed at this time last year. At this time, for a similar number of borrowers, $28 million.

THE PRESIDENT: From $16 to $28?

STUDENT: Yes. The same amount of borrowers. Since last year, I've been a graduate assistant at -- university financial assistance. It's a work-study position. And I've seen how the program works for students, both the Pell and direct lending. Last Friday, the last student I saw came with her parent's promissory note -- the PLUS loan promissory note, and with a scholarship check. In 15 minutes, she left the office with the loan corrected, her budget corrected because the loan was done for a higher amount once she got the scholarship check. And that same evening, the proceeds were credited to her bursar account just like that. It's impossible that that would have happened under Pell.

Direct lending allows schools to provide more efficient services and its elimination will not serve the larger public. At Indiana University, some borrowers and their families spent a lot of time waiting in lines, fixing problems and putting out fires. In those days, 20 percent of the office staff processed loan paperwork. Now, this same staff is in direct client service, meeting with the students.

Of course, the line is not as long as it used to be, like Pam said. Less time at the financial aid office worrying about money matters translates into more time concentrating on education, which is what we're supposed to be doing. With the cost of education today, there are many students like me in this country who would have never been able to attend college without federal student loans. Education is for students, and it's for this country's benefit and well-being. And I'm worried that if we go on letting the rabbit guard the carrots, this would be done at the expense of the public good.

THE PRESIDENT: So am I. That's why I'm here. (Laughter.)

MS. BRITTON: We are concerned about direct loans, but we're also concerned about the Pell Grant program here at SIU, as well as other undergraduate grants. Duane would like to speak to that.

STUDENT: Mr. President, I'm one of the many students at SIU that Pam talked about that receives the Pell Grant and other grant programs. We're a very needy campus, and we distribute $11 million in Pell program money to over 7,000 students.

And I'd like to say that without the Pell Grant program, as an independent student like I am, I would not be able to make it through school on just the loans and the amount that I can work and successfully do my studies. I've received the federal Pell Grant, the SEOG and the Illinois MAP grant which is funded by the SSIG, every year I've been at school. It accounts for roughly about a third of my educational costs, and I work as a tudor and that covers about a third of my costs. And I take about a third out in loans.

The grant programs, as I stated before, that's really the cornerstone of how I can finance my education. And without those programs, it would take me longer to get through school. The incentive to even stay in school would not quite be there just because I can be racking up so much time, and I really need them, and a lot of students just like me that are lower income group also.

If, per se, as it has been proposed by some people to just give all loans and no grants, my debt burden out of college in an entry-level position would just be astronomical. I'm going to make roughly maybe $20,000 to $30,000 my first year out, and if I took out all loans I could -- at Southern, which is a cheap institution, relatively speaking -- anywhere from $30,000 to $40,000 in loans just to get through school.

So the grant programs are very important, and I believe most students would say that the federal government should, in essence, as the proverb goes, not just give fish out, but teach people how to fish. And that's what federal grant programs do; it gives us as students, as citizens, the ability to get trained, to get educated, and become productive members of society, and to pay our taxes, as Pam had said, and really to compete globally. So, thank you very much.

THE PRESIDENT: I agree with that. You know, I think most taxpayers resent it if they think their money is going to people who don't need it, people who get tax breaks who are very well off, or people who won't work, who won't try to help themselves. The student loan and the student scholarship program, by definition, go only to people who are trying to help themselves.

We have increased the maximum amount of the Pell Grant and propose to do it some more, and to have some smaller Pell Grants, between $400 to $600 a year to help people who maybe have a little money, but don't have enough.

One of the big arguments that I'm in now with the Republican Congress is that both of us agree we should balance the budget, but I think it's better to take a little longer, have a smaller tax cut and increase our investment in education. So the difference between our two proposals is, there would be 363,000 fewer people getting Pell Grants under their proposal than mine, and the maximum grant would be considerably smaller, and the smaller grants would be cut out under their proposal.

Again, I would say that it seems to me that the main thing we ought to be doing today is try to help people who are willing to help themselves, trying to empower people to make the most of their own lives. And they say that's what they believe in, but it's just inconsistent. You do not have to cut education to balance the budget; you don't have to do it. And it's sort of cutting off our nose to spite our face. I mean, the whole argument for balancing the budget is that it's going to strengthen the economy. And you know, I mean, that's the argument for doing it, right? And if we do it right, it will.

That is, obviously, if we don't keep borrowing money every year just to pay the same bills, it will lower interest rates and free up money for people to borrow money and start businesses or expand businesses and create jobs. But if the way to balance the budget is to make the American people less well-educated, all it will do is to continue to drive wages down in this global economy where most people are working harder for less money, anyway.

I consider this decision on education basically one of the three most important decisions that will be made in the Congress in the next 60 to 90 days over this budget. Is it worth it to balance the budget in the way they want to do it if to do it you have to cut education, if there is a better way to balance the budget? I think the answer is no, take the better way. But that is the big -- I mean, Duane just sort of laid it out -- what the choices are for you, and you can multiply that by millions and you can see the future of America.

MS. BRITTON: We have some concern related to graduate students, and Mary wanted to speak to especially --

THE PRESIDENT: I read about you. (Laughter.)

STUDENT: That's what I'm afraid of with the press. I was told I had two or three minutes to say everything to you that I would like to say to the President of the United States. With that in mind and not being a graduate in speech communication, I've written mine, so that I don't forget anything and get home and say, wow, I wish I had said that.

When I was told that you were coming to meet with students at SIU and that I might be able to attend the meeting, I thought a crowd of 200, and gee, I'll be lucky to get a sight of him, but it was thrilling, it really was.

When I learned the group would be smaller, I thought there might be a chance to shake your hand. That was pretty good. When I learned the group would be 12 to 15 students, I began to get nervous. And when I learned that I was to speak as a graduate student receiving financial aid, I said, wow. (Laughter.)

I'm no one special. Like most graduate students, I found the life course that I want to follow, and it requires more education. I'm pursuing a Master's degree in gerontology. I'm at the right age for it. (Laughter.)

Like most graduate students, I'm not pursuing a specialized degree in order to make money; I'm doing it to find work in my chosen field. I spent seven years volunteering in victim assistance. Sometimes, I spent 40 to 60 hours a week working with victims. Because I didn't have a college education, I could not get paid for that work. I could write the grants, I could initiate the programs, I could the volunteers and I could train mental health professionals, but most government jobs, whether they be civil or federal or state, have to be thrown open to the public. And once it was thrown open to the public, I was not allowed to have the job; I didn't have a degree.

That was okay with me while I was married and had the luxury of volunteering; I loved what I was doing. But when my marriage ended and I knew that I had to find a way to make a living that would allow me to continue working with victims, I knew I had to get back to school. It is my dream to work with elderly victims and to teach. Without the federal subsidized student loan program, I couldn't make this dream a reality.

I understand that Congress is considering cutting off subsidized loans to graduate students. The building is going to collapse. I'm shaking pretty hard. Cutting off those loans would have meant to me and other graduate students a minimum of 20 to 30 percent increase in the amount of money we have to pay back. I will never make much money doing victim assistance. I could not afford to pay back that much money. The loss of subsidized loans would have meant the end of my dream.

Most graduate students are just looking for a way to fulfill dreams of careers in their chosen field. It is a myth that most of us will make big salaries. The majority of us will be middle-income Americans struggling to make it like most everyone else. We aren't seeking power other than the power to make a living for ourselves. We aren't seeking prestige other than the prestige from doing a job well. We won't be special to anyone except our families and perhaps the lives of those we touch. We're just asking for a little help in attaining a level of ability that will allow us to make a meaningful contribution in our chosen field to the society that believed in us.

I don't consider this a handout. I believe, and I think most Americans believe, that it's an investment in the future.

THE PRESIDENT: Good for you.

MS. BRITTON: We have one last student that is prepared to give just an indication of their personal experience. Rick Collie.

STUDENT: I would like to start out by saying that in 1977 I dropped out of high school. And the years up until 1992 when I acquired my GED, I struggled to make a living at minimum wage jobs and never really was satisfied with anything. And I decided to come back and get my GED in 1992. And I made a couple of attempts at it and dropped away from it, but I finally went back and got it.

When I took the test, I got the highest scores ever recorded at Shawnee Community College up until that day. And then I went on since then to acquire two associate degrees in science and in the arts. And I'm entering the LPN program now. I must say that federal student loans have helped me tremendously. They've been paramount in my education because without them I would have been struggling to this day, trying to get by with just a minimum-wage job. And my intent is to go on to study physical therapy at Washington University in St. Louis.

And again, like she said, I want to be a productive part of society. So the federal student loan program has helped me tremendously.

THE PRESIDENT: A great story. You know, Mary, one of the proposals on the student loan program has been to start charging students interest on the loan while they're in school, and then to, maybe also start charging them to so-called "grace period," you know, the six months after school where you can go look for a job and finally try to find placements.

If that happened and the Direct Loan Program were abolished, or made unavailable to huge numbers of students, the combined impact of that, on the average for graduate students, would be an increase in the debt of about $9,300 without the option to pay it back as a percent of your income which, for graduate students, which for graduate students in the non-professional areas would be a disaster -- I mean, like the lawyers and the doctors and the accountants. You might argue -- well, even the accountants, a lot of them are not going to make much money in the beginning. But I mean, the --

STUDENT: I couldn't do it.

THE PRESIDENT: It's a serious problem. I really do believe if enough of your voices are heard between now and whenever we finally adopt this budget, which will probably be sometime in October or November, in that range -- they're not going to do it by September 30th, which is the deadline and they won't make it this year -- but I just think it's very important to get this story out there.

And, Rick, I'll just use you as an example. When I ran for President, I was in my fifth term as governor of my state; I was having a good time -- a lot of my state looks like Southern Illinois, which is probably why I did so well here. But I just realized that unless somebody did something to change the direction of the country, we were going to face -- we had already faced by 1992 almost 20 years of stagnant wages for hourly wage- earners. Now we have -- since '73, the average male worker in America today, once you adjust for inflation, is making about 10 percent less than he did in 1973 working a slightly longer work week.

Almost all of the economic gains have gone to those people like me in the upper 20 percent of the society. So my goal has been, as President, not only to create more jobs, but to raise the incomes again, to give working families some sense of stability. It's the biggest economic problem in the country.

Most people who do what they do, like Mary said, most people do what they do knowing they're never going to be rich. That's not the point. The point is that people ought to know that if they work hard and are diligent that at least they'll do a little better year in and year out. Not that you're going to get rich, but that you'll be able to have a family and raise children and have a stable life. And so that's a very serious concern.

And if you look at the last two years of our administration -- now, this wage thing has been going on for 20 years. So you just can't turn it around like that. So in the last two and a half years, we have -- to show you how pervasive it is -- since the day I became President, we've got 7 million more jobs, 2.5 million more homeowners, 1.5 million -- actually, probably like 2 million more small businesses now -- the most rapid growth of small business in American history. The stock market is at a record high. Corporate profits are high. Inflation is low. The combined rate of unemployment and inflation is at a 25-year low. But the median income, the person in the middle -- not the average because the average gets jerked up by the people at the top -- the median, the person in the middle has dropped one percent.

And why is that? There are only -- there are two or three things we can do about it. The first thing we have to do is to try to change the mix of jobs in America, to try to get more higher-wage jobs with a longer-term future. But you can't do that overnight. The second thing we have to do is to raise the educational level of the American people because people who are being just hammered out there in this country today are people who don't have at least two years -- a community college education. Basically people that have two years or more tend to do pretty well in this economy, tend to be able to hold their own and then sort of move forward. And it strengthens the American economy. That's what this issue is about.

So if we balance the budget -- and I'm all for that. We've cut the deficit from $290 billion a year to $160 billion a year since I've been president. I think it's nuts just to run a permanent debt. But if we cut it by cutting education, then we will compound the most important economic problem we have which is that people are working harder for less. So what we need is more people like you, not fewer.

STUDENT: The student loan program allowed me to free up my distress and bills that were due and things I had to pay, and I could focus on my education. And I graduated with honors.

THE PRESIDENT: Don't you believe, though, if we dramatically raised the cost of higher education that fewer people would go and more would drop out?

STUDENTS: Absolutely. Most definitely.

THE PRESIDENT: We have evidence of that, by the way. I just was in California over Labor Day where -- California had the worst recession of all the states in the last few years because they had the huge impact of the defense cuts because they had most of the defense industry when we built it up. And there were other reasons as well.

And one of the decisions they made in California was when times got tough, they would cut education and raise the cost. And the California system of public education was generally believed to be the finest ever created by any society anywhere. They have 21 colleges in the state university system. And then I think they have another 9 or 10 in the University of California system.

And it used to be free, and they had to put some fees on it. But they raised the cost so much in the last few years that enrollment is down 19 percent. Well, if you're at a high unemployment rate and stagnant incomes, the last thing you want to do is drive down college enrollment, right? You want to drive up college enrollment. So I don't want our country to do that.

So it's not just all of you, it's millions of people out there like you -- millions. And the whole future of the country depends in part on -- in other words, it doesn't matter what I do in terms of economic policy or how much I try to change the job mix in America unless the people in America have the education to do the jobs of the 21st century.

To me, this is self-evident. You cannot imagine how important this event is today. I'm telling you, this is one of the two or three most important decisions we're going to make in the next 60 to 90 days, and it will color the whole future that you will have.

STUDENT: I was lucky enough to get under this program. I have a son who is a junior in college who was lucky enough to get in. I have a son in Maine who has a five-year-old child who had a liver transplant at the age of six months. Rex wants desperately to go to school, but he doesn't fit into this program.

MS. BRITTON: You talked about the higher cost of education. We might want to hear from our Knox College private student.

THE PRESIDENT: I'll look into that. Go ahead.

STUDENT: Well, I attended Knox College, a private institution, and their tuition is rather high. It's about $21,000 a year. And when I was going through the application process I was accepted at another liberal arts college in the Midwest, and they said they were not able to offer me a financial aid package which was suitable. But, fortunately, the admissions officer, the director of the college, he referenced me to Knox and they were able to put together a package which would suit my needs. And it was heavily endowed with federal money, including work-study, which has actually been really great for me. Using their work-study program, I worked for the Knox College Youth Center.

THE PRESIDENT: That's good.

STUDENT: And while I was working there, I learned the skills that enabled me to acquire a job with the National Football League this summer in terms of enterprise computing.


STUDENT: And general networking issues. And things went so well this summer that at the end, they had offered me a full-time position, and they didn't want to let me go. And it's this kind of real-world experience which you can only get working at a college level because no one wants to hire someone without experience which is the old mantra that everyone always cries. But your program has made it available for us. And I'm also part of the Ronald D. McNair fellowship program which is under your Trio Division.


STUDENT: And this last term was very frightening for us in the program because we didn't know, going into the summer, if we were going to be refunded this year. And it's a program which emphasizes graduate school studies after college. And this is, again, the group that we're trying to target in order to get into that level. Because in today's job market, a bachelors degree just doesn't make it anymore, and you need to get a graduate school education.

STUDENT: Also, I'm a graduate from Upward Bound, one of the Trio Programs. And they say we're low-income, first generation college students. So these are the students that whose families are on welfare, they're on all these other kind of like social aid programs, and so if we can get them into school, then that's raising the education level of society.

MS. BRITTON: And at the graduate level, Vanika is on the special fellowship --

THE PRESIDENT: Good for you.

STUDENT: I'm 100 percent funded by financial aid, and right now, I'm assisted by a PROMPFT fellow, which is the Proactive Recruitment of Multicultural Professionals For Tomorrow, and I also receive a direct loan. Without that money, it would not be possible for me to attend school. I've worked through undergrad, but I still accrued over $20,000 in loans for undergrad and graduate school.

So when I get out of school, even though I plan on pursuing a Ph.D. eventually after my Master's, with the money I owe with my loans I'm not going to be able to take a position like I want in teaching if this new direct loan process goes through, if they change it the way they want to change it, whereby you have to -- they don't allow us with a grace period, because I think the grace period is very important for those students because you can't get out of school at one point in time and then automatically turn around and start paying back that money and --

THE PRESIDENT: You've got to have a job first.

STUDENT: It definitely would help to have a job. And right now, I decided that I do want to teach. I want to get back. So, in order for me to do that, they have to continue with the direct loan, which I think is benefitting most of the students, or a majority of the students right now. I think it's very important.

THE PRESIDENT: So you could pay it back as a percentage of your income?

STUDENT: Definitely. I think that would really help out. And a lot of people can do the work they enjoy, such as teaching and gerontology, or whatever. You know, if you can't do the work you enjoy doing, then you're not going to have those best people -- the best people in these teaching positions like we should have.

THE PRESIDENT: And, of course, most of the jobs will be in service job growth, too.

Brian, were you going to say something?

STUDENT: I just wanted to state that without this grace period, I mean, it would really be detrimental to the student because you're lucky in that six-month time period that you can even get a couple of interviews to start with. (Laughter.) And you're more worried about paying your debts than being a qualified prospect for an employer. You're going to give them a bad presentation because they are looking at this aspect of you that you're vulnerable and you're upset about things and intense. So I mean, it would be really a bad situation if they decided to remove that six-month period.

MS. BRITTON: I know Michelle's been trying to say something here.

THE PRESIDENT: I'm sorry, Michelle.

STUDENT: That's okay. I just -- this is so important to me, and this is the greatest opportunity that I could possibly have, to talk to you and bring three issues together that people sometimes like to keep so separate, and that's welfare reform, day care, and higher education. Because welfare reform is needed so badly, but we can't have that if we don't have financial aid, because, yes, I heard Robert Dole say that there's pride in washing windows at $4 an hour, but, I'm sorry, that's not going to pay my bills, and it's not going to put my son through day care.

And without the subsidized day care that I get, which I've been a student leader for three years, which four years ago I was 100 percent dependent on welfare and never even dreamed that I'd be in school, let alone a student leader, and here I am. I found a great job and a great day care, but every single year, you have to write to congressmen about financial aid, you have to write to congressmen about day care. Come on, we've got to keep doing this, we've got to get you students involved, we've got to get you parents involved.

But, yet, if I want a welfare check, I can walk down there and have one in three days. Yet, I have to keep fighting to improve myself. It blows my mind because all I want is to be a better person. I just want to go to school. I want my son to say, my mom has a job, instead of, my mom goes down to the welfare office every month. I want a little pride in there.

And to come here today -- and I know that you stand behind these programs, and I am honored because we have dealt with so many other issues for so long, and for you to come in and finally deal with domestic issues was wonderful and at such a great time, because so many people out there are hurting, so many people would say, "Michelle, why are you going to school and work? Why are you stressing yourself out? Why don't you stay home and enjoy the time with your child? Live on welfare. It's easier. You're so stressed." I said, "Because I'll jump through the hoops if I have to. I want to be somebody."

But, yet, they want to cut Pell Grants, they want to cut loans. They want to make it difficult. And it's very difficult. And day care -- if I didn't have the subsidized day care, I wouldn't be here, because I won't leave my son with just anybody.

THE PRESIDENT: That's the argument we're having in Washington now over welfare reform.

STUDENT: I know.

THE PRESIDENT: I told them that I would gladly support programs that would save money on spending and welfare reform and put limits on how long people could stay, if you would give more for child care and if we keep the student aid programs. Because, basically, welfare reform is about education and work and child care; it's not very complicated.

You know, I have spent since 1980, when most of you were real children, I have spent a lot of time with people on welfare. And I found out the people with the deepest desire to change the system are people who have been on it.

I've almost never met anybody that didn't want to get off, and also who all have the best ideas. I'm glad to hear you say that. Good for you. I'm proud of you.

STUDENT: Three years ago, you wouldn't have heard me say it, because it's easier for welfare. But there is a drive, and I think my parents, because when I was growing up, they gave me a strong foundation. You know, I've made a lot of mistakes. I've really messed up. But I'm here today because I had that foundation. Some people aren't so lucky and they don't want to jump through those hoops because it's really hard. It's really hard to fight for your financial aid and to fight for your day care. And it took me two years just to get the day care funding. You know, I mean, get in the day care.

MS. BRITTON: We're running short of time, and I want to give Raymon and Allison an opportunity to say at least one thing.

THE PRESIDENT: You guys are great.

STUDENT: Once again, I can't so how much this is a great opportunity. I can speak personally on the Pell Grant and the SEOG loan which is now the Direct Lending. There are so many students, including myself, that would not be able to go to college. And we're talking about the welfare and coming out of the low-income families. There has got to be a way out. And for some people, it's college.

And when you turn back that, you're always told that college is so expensive and there is no way for you to go to college unless you're going to get a scholarship or some athletic sports, or whatever, or you're really smart. But there are some students who aren't on those two levels, but also can become productive individuals of society. And I'm one of those people. And I just want you to know that I strongly support not decreasing the Pell Grant but, if anything, increasing it. Make it available to more people because there are so many people who are getting cut out even now. So that's why I'm with you.

STUDENT: I guess I have a question more than anything. I was talking with one of your aides beforehand about the proposals by the new Congress to limit the growth of the Direct Lending Program and that's been so beneficial, I know, on my campus. It's so much more of an efficient program. And as I was talking to my congressman this last weekend, he was informing me that what it does bottom-line is it takes more of the money that you put into the student loan programs at the federal level into the hands of students as opposed to administrators, such as banks and private lending institutions.

THE PRESIDENT: You got it.

STUDENT: So I was wondering how you felt about the possibility it will be capped off?

THE PRESIDENT: I think it's a terrible idea. But it's not as terrible as getting rid of it altogether, though. The House of Representatives wants to get rid of it altogether. I mean, not the congressmen that are here. They all fought it. But the majority. This is not complicated. Banks used to make a lot of money doing this, and they want their money back. This is not a complicated thing.

They want -- and, interestingly enough, they pulled an incredible gimmick. They basically got -- the new majority in the Congress got the people who run their budget office to pull an incredible gimmick. They said that in calculating the cost of the Direct Loan Program, as compared with he cost of the old student loan program, the guaranteed loan program, we had to calculate the administrative costs of the Direct Loan Program and put it in, but we couldn't count anything of the administrative costs that we paid for the Guaranteed Loan Program to try to make the Direct Loan Program look more expensive than the guaranteed program when everybody knows it's cheaper. It is bizarre. I mean, that's the kind of stuff that's going on up there.

And it's just classic -- it's a special interest group that overlooks the fact that the stories that you all have told are good stories for America's future.

Let me just say one other thing. I will say this: A lot of these guaranteed loan providers have gotten quicker and cheaper and more responsive because of the competition. So what we wanted to do -- I've never wanted to deprive a student or an institution of the right to use a guaranteed student loan provider. Because if we did that, the government might get sort of fat and sassy, too, and unresponsive, if you see what I mean.

In other words, my goal, always was to set up a competition where people could choose a Direct Loan Program because of its obvious strengths, where the others would have to do more to try to compete and where, if the Direct Loan Program started to fail people down the road because they thought they had a monopoly, there were other options available as well.

That's what my goal is. My goal is to have 100 percent open option for the colleges and universities of the country. But the worst thing to do would really be terrible if it were abolished, and I think it would be a mistake to cap it.

MS. BRITTON: That's probably a good note for us to end on. We'd like to have you for the rest of the afternoon, there are a few thousand people out there who would also like to hear you.

THE PRESIDENT: You know, I'll give a better speech because I was in here with you. I mean, really, you know. One of the problems we have in Washington is that people like you, the people who basically are out here making this country go are -- normally tend to be so busy keeping body and soul together and doing what you want that you're not organized. The people that are organized and can hire lobbyists and have influence up there, you're not them.

So that's one of the biggest problems in decision-making. And that's why I try to do everything I canto get out in the country and give people like you by my presence here a chance to have your voice heard up there because there's more of you than them. You're just not there. You're here. And I hope we can save this program.

Yes, Brian, what were you going to say?

STUDENT: I just wanted to say that when I entered my undergraduate degree, I went in under the Stafford, and I was fortunate enough that I had worked very hard in the summer before school to have enough money to survive for a month or two, because I, myself -- my Stafford didn't come through for a couple months. But now when I see the success of direct lending -- we are -- been very fortunate that it's gone so well.

You know, these students will come daily to find out if their money is there because it overwhelms their life. It's more important than school because they know they cannot be there, they cannot go to their classes if their classes are dropped. So it was so nice to see that students rebel to get the need that they had taking care of it as soon as possible.

Like was mentioned earlier, the disbursement of these checks was actually five days after they actually turned in their promissory note or less. And their whole lives just were uplifted and they were able to actually enjoy Illinois State or any institutions overall because the money was no longer an issue; they could secure their future for the next eight months until the next semester came along, until they get their second disbursement.

THE PRESIDENT: Didn't you say you had a national defense loan?


THE PRESIDENT: I did, too. And you're the first person in your family to go to college?



STUDENT: I'm the first in my family.

STUDENT: Mr. President, a point very important that I think is missed out in the debate is that the direct lending is substantially less bureaucratic, substantially less bureaucratic. I have with me -- I can show it very briefly -- I have with me -- this is at Indiana University, basically, what you need to do is complete this application, which is very simple. Here you say you want -- you're interested in loans, and then you sign one of those, the promissory note.

THE PRESIDENT: A one-pager.

STUDENT: One page, that's it. That's it. The margin of error is extremely small.

STUDENT: I've got that myself.

STUDENT: Here is an application for Pell. It has four pages. It goes to four different people. It has 16 different lines. (Laughter.) If somebody does not fill it completely, it goes back to the person. So it's not just the time that it takes the lender to get back -- not to get the money to school so that the school can disburse it to the student. Sometimes, and fairly often, is the problem with the complexity of the application.

STUDENT: You also have to hope that the banker gives you the right form.

STUDENT: And to find out where the problem is --

STUDENT: And often there is an error, and then they get verification, and then it's like even longer afterwards.

STUDENT: I got the wrong form three times. It was almost a whole semester before I got my loan one semester. And that was the bank.

THE PRESIDENT: Let me just out one other thing --

STUDENT: It's just a long -- a long period of time. You need a crystal ball just to find out -- (laughter.)

THE PRESIDENT: I'll tell you something else --

STUDENT: It's just --

STUDENT: Let the President talk . (Laughter.)

THE PRESIDENT: No, no. The loan default -- another thing, because of this you need to know the loan default rate. If you look at it from the point of view of the taxpayers who want their money back -- I mean, I paid my college loan back. I felt morally obligated to. And I think I feel like you, that one of the reasons I never resented the taxes I pay is that my country helped me get an education; I figured I ought to give it back so other people could get one.

But what I was going to say is, one thing the taxpayers need to know is that we have cut the loan default rate in half since I've been President -- the loss to the taxpayer. And part of it is because the system is different. If you're running a bank, right, and you loan me $10 grand, and you've got a 90-percent guarantee from the government, and I don't pay you back, if you don't lift your finger you get $9,000. If you hire a lawyer you've already spent more than $1,000, right? So the whole thing -- that's another thing -- the whole system is organized to maximize defaults.

Our system is organized to make it easy for everybody and to be tough on getting the money back. I mean, it's very different.

STUDENT: Here is another point. (Laughter.)

THE PRESIDENT: I'd better take her back to Washington. (Laughter.)

STUDENT: The people talk -- the debate is that the government does not keep papers right. (Laughter.) This is the paper the same agency sent to me. Look, the interest rate is different. The amount they say that I pay is different for the same date. And on top, my register has sent them certification saying that I'm still in school full-time, and they still have me -- they insist that I need to request another in-school deferment because they don't have it updated. And I say, but you must have it. I sent them a copy.

STUDENT: That happened to me, too.

STUDENT: Yes. You don't have that in direct lending because you don't have to mess up with requesting in-school deferment because the school -- it is a lot less bureaucratic and the margin of error is cut down substantially.

STUDENT: This is the same center that sat on my loan for a month. And when I called back and said where is my loan, they looked at the file and they said, so, gee, I don't know why we haven't sent it to you. (Laughter.)

STUDENT: -- one of the biggest interests in the whole process with the most to lose.

STUDENT: I come from Indiana, where USAF is there. USAF is the largest guarantee agency in the state. Indiana University fought a very strong battle to get direct lending. And at our office we have a spectrum of political views, and the most critical person said to me before I came -- she knew I was coming -- she said to me, make sure you tell him that I have converted to direct loan. (Laughter.) She was absolutely against direct loans. It works. It does work.

I'm finished. (Laughter.)

THE PRESIDENT: This has been unbelievable. (Laughter.) I don't want to leave you guys. You're great. Thank you.

MS. BRITTON: We thank you very much for all you do for us.


END 11:43 A.M. CDT