Clinton loans 'save student money'

February 3, 1995

University administrators all over the United States are telling Bill Clinton that they are saving "weeks and weeks of bureaucratic time" because of his new student loan programme.

Thus President Clinton bragged about one of the achievements of his first two years in office in his State of the Union address last week.

The loan programme enables students to borrow money directly from the government rather than going through middlemen and the private banks. It was introduced to save time and money.

Launched as a pilot, it also enables young people to repay loans in line with their income after college, rather than at a fixed rate.

According to the department of education, the scheme is working well and saving students a good deal of money.

"We shouldn't cap that programme," said Mr Clinton, speaking to Congress and the public via television. "We should give every college in America the opportunity to be a part of it."

The president made education one of the centrepieces of his speech. It was his way of trying to connect with ordinary Americans. But he also is struggling to ward off Republican spending cuts, and made clear that he would fight to protect the direct loan scheme, which is not entirely popular with all higher education groups or all Republicans.

Some higher education experts are worried that students will end up expending far more money in total by having repayments linked to income, and some Republicans do not care for expanding the role of government and excluding middlemen and the banks from student loans.

Mr Clinton also made a passionate pitch for his beloved national service corps, known as Americorps. This programme puts young people to work in the community in return for help with college fees. It has begun in a smaller way than envisaged with 20,000 young people working as volunteers cleaning up the environment or in health and education. "This is citizenship at its best," said Mr Clinton. "It's good for the Americorps members, but it's good for the rest of us too."

Up in the gallery of the House of Representatives Hillary Clinton was sitting flanked by Americorps members. At the end of his speech the president introduced some of them. First was Cindy Perry, who got married as a teenager, but who today teaches second-graders to read in rural Kentucky.

"Stand up Cindy," the president ordered. "She had four children, but she had time to serve other people, to get her high-school equivalency, and she's going to use her Americorps money to go back to college."

Even Newt Gingrich, the new house speaker, had to applaud this achievement. Gingrich is opposed to Americorps on the grounds that it brings central government into an area that he thinks is best left to voluntary effort.

Mr Clinton's speech was notable for its lack of new programmes and ideas.

Echoing the Republicans desire for tax cuts, he reiterated his commitment to tax deductions for all education and training after high school.

And he called for a GI Bill for America's workers. His idea is to offer vouchers worth $2,600 a year for up to two years to unemployed workers or those on low wages. They could spend these on courses at their local community colleges to update their skills.

"Let's empower people in this way. Move it from the government directly to the workers of America," he said.

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