Clinton Touts Drop In Education Loan Defaults
WASHINGTON (AllPolitics, Jan. 9) -- Flanked by a half-dozen college students, President Bill Clinton told reporters in an Oval Office briefing today that college loan defaults were at a record low. He also said he would "reach out" to congressional Republicans to reach a balanced budget agreement this year.
The president, joined by Education Secretary Richard Riley, released a government report that put the fiscal 1994 default rate at 10.7 percent. That's 40 percent lower than when he took office, Clinton noted, and the lowest rate since 1988 when the Education Department began keeping track. The highest default rate was 22.4 percent in 1990.
According to the report, the lower rate is the result of a crackdown on delinquent borrowers by the administration, Congress, lenders, schools and student loan guarantors.
"The bottom line is this report shows our strategy of opportunity and responsibility is working," Clinton asserted. And he took the opportunity to press for a key education campaign promise -- expanded tax breaks for college.
"The atmosphere so far feels good to me and if we just keep working on it we can get there," the president said. During the campaign, Clinton proposed offering a $1,500 tax credit for the first year of college or vocational school. A second $1,500 credit would be available to students who are drug-free and achieve a "B" grade average.
Asked about prospects for a balanced budget agreement with congressional Republicans, Clinton said, "I am making a clear effort to reach out to them, to meet them halfway and to get this job done." He declined to say if he favored raising Medicare premiums for wealthy retirees. The administration will release its budget in early February.
The new education report shows the total money loaned rose from $12.3 billion in 1990 to $23.1 billion in 1994, which the government attributes both to more borrowers and, in some case, larger loans. The default rate figures do not apply to new loans made under the administration's new direct loan program.
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