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                            August 10, 2000

Today, President Clinton will announce new steps to make college more affordable for students and parents, and to allow graduates to choose rewarding careers. First, he will announce two new steps by the U.S. Department of Education to lower interest rates on direct student loans for students who meet their responsibilities by repaying their loans on time. These changes will save students and parents $600 million, and save federal taxpayers $5 million, over the next five years. Second, he will announce that the Clinton-Gore Administration is proposing a new rule to ease college debt for teachers in lower-income communities. Finally, he will call on Congress to enact his proposals to strengthen education and make college more affordable, including the College Opportunity Tax Cut, which will especially help middle-class families.

PRESIDENT CLINTON WILL ANNOUNCE TWO STEPS TO LOWER INTEREST RATES ON DIRECT STUDENT LOANS. New incentives will reward students who repay their loans on time. Together with other interest rate and fee reductions since the start of the Clinton-Gore Administration, these incentives will save students as much as $1,300 on $10,000 in loans.

THE PRESIDENT ALSO WILL PROPOSE A STEP TO EASE COLLEGE DEBT FOR TEACHERS IN HIGH-NEED COMMUNITIES. Today, the U.S. Department of Education will propose a new rule providing loan forgiveness for teachers in lower-income areas that have trouble retaining teachers. The new rule -- which implements a provision of the Higher Education Amendments of 1998 -- would forgive up to $5,000 in loans after five consecutive years of teaching in needy schools, at least one of which must have been 1998-99 or later. Through 2003, over 25,000 teachers will receive $122 million in loan forgiveness. Teachers must not have had either: 1) outstanding student loans on October 1, 1998, or 2) outstanding loans when they obtained new loans after October 1, 1998. This policy will help today's students afford college, become teachers in needy areas, and stay for at least five years. The final rule is expected to take effect on July 1, 2001. -- Over the next decade, U.S. schools must hire 2 million teachers to accommodate increasing enrollments and the retirement of many veteran teachers. (U.S. Department of Education, Prospectus: The Educational Excellence for All Children Act, 1999) -- More than one-fifth of all new teachers leave the profession within their first three years. (Ibid.)

EIGHT YEARS OF STUDENT LOAN REFORM. Today's announcement builds on eight years of effort to reform the student loan program and create more opportunities for college. The Clinton-Gore record includes: