As prepared for delivery
WASHINGTON - Welcome, everyone, to Treasury. I want to thank the members of the Financial
Literacy Education Commission for their hard work, and I also want to thank
Secretary Arne Duncan and Director Rich Cordray, who is Vice Chair of the
Commission, for joining us today.
President Obama has made clear—the surest path to a growing economy is a
growing middle class. But the problem
is, for more than a decade, trends have been at work in our economy undermining
what it means to be middle class. It is
imperative that we do what we can to reverse these trends. And that brings me to what today is all
One of the
clearest ways to grow and strengthen the middle class is to expand access to
higher education. Workers who get an
education beyond high school are more likely to be employed, earn higher wages,
and rise up the economic ladder.
by Treasury and the Education Department has found that for children in middle
class families, earning a college degree increases the likelihood of upward
income mobility by more than 75 percent.
Viewed another way, people with at least a four-year college degree earn
more than twice as much as those who do not have a high school diploma.
a higher education—whether it is a technical certificate or a four-year
degree—is critical in today’s economy.
important as higher education is, the cost of it has never been greater.
average tuition at a public four-year college has increased by 250 percent over
the last 30 years. But incomes for most
families grew by only 16 percent during that same period. While the recent study published by the
College Board suggests that college cost increases are moderating, still more
needs to be done.
that a lot of young people are missing out on a college education simply
because they cannot pay for it. This is
especially true for students from low- and middle-income families. Cost, in fact, is keeping many of those who
are in poverty from getting the most effective tool for climbing out of it.
the past four years, this Administration has taken steps to make college more
affordable. We lowered the interest
rates on student loans.
reformed the student loan system to eliminate bank subsidies and channel those
savings directly to students. We
increased the maximum Pell Grant award by more than $900. We created the American Opportunity Tax
Credit to make college more affordable for millions of students and
families. And we made it possible for
many borrowers to cap their student loan repayments at 10 percent of their
critical that students know about these policies, and among other things,
Treasury has been working with the Education Department and agencies across the
Administration to get the word out about their repayment options.
the skyrocketing cost of tuition continues to put higher education out of reach
for those who need it most. It is also
saddling young people with massive student loan debt. The average borrower now graduates owing more
than $26,000. This debt is hampering our
economy by keeping young people from buying homes, creating businesses, and saving
for retirement. At the same time, loan
default rates are rising.
why President Obama has put forward new initiatives to make it easier for
families and students to afford a higher education.
initiatives offer practical solutions to this problem, and in a few moments,
Secretary Duncan will speak about them in more detail. They include the creation of a new ratings
system for colleges and universities.
This ratings system will soon measure schools according to the value
they provide so students and families can make the most of their money. In addition, the President is working to
encourage schools to come up with innovative ways—like expanding online course
offerings—to lower costs.
On top of
all that, the President is pushing colleges and universities to help students
make smart financial decisions.
giving students—through counseling, web sites, and even the tax filing process—a
stronger grasp of their student loan options, their debt obligations, and their
personal finances. We want young people
to be better informed so they can manage their expenses, save for the future,
and achieve their financial and personal goals.
And later you will hear from experts who are making this happen.
I am glad
we are here today to find ways to make it easier to get a higher
education. This work is extremely
important. It will open up new doors of
opportunity so more Americans can find better jobs, start new businesses, and
continue to drive American innovation.
country has prospered because it has always been a place where you can turn
grit and determination into a brighter future.
This is the country America has always been—and this is what America can
and always should be.
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