• September 2, 2015

Obama Reaffirms Support for Community Colleges at Signing of Student-Loan Bill

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Pablo Martinez Monsivais, AP Photo

President Obama gives a thumbs-up signal during a ceremony at Northern Virginia Community College, where he signed the health-care and student-loan measure into law last week.

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Pablo Martinez Monsivais, AP Photo

President Obama gives a thumbs-up signal during a ceremony at Northern Virginia Community College, where he signed the health-care and student-loan measure into law last week.

President Obama signed legislation last week that ends the bank-based lending system for student loans and pours tens of billions of federal dollars into higher education.

At the signing ceremony, which was held here at Northern Virginia Community College, the president also announced that Jill Biden, wife of Vice President Joseph R. Biden Jr. and an English instructor at the college, will lead a community-college summit at the White House this fall. The president thrust community colleges into the limelight last summer when he called on them to produce five million more graduates by 2020 and proposed a $12-billion plan to improve and expand the institutions. But the student-loan bill provides just a portion of the money Mr. Obama had sought.

The legislation, which also overhauls the nation's health-care system, uses the savings from ending subsidies to private student lenders to provide about $43-billion over 10 years for spending on education. Most of that money, about $36-billion, will go to the Pell Grant program for low-income students. Other beneficiaries, in addition to community colleges, include minority-serving institutions and a grant program to improve college access and completion.

President Obama called the student-lending overhaul "one of the most significant investments in higher education since the GI Bill." He criticized the banked-based lending system, calling it a "sweetheart deal," and condemned loan companies such as Sallie Mae that spent millions of dollars on "armies of lobbyists" to fight the bill.

"We need to invest that money in our students," the president said. "We need to invest in our community colleges, we need to invest in the future of this country."

In announcing the White House meeting on community colleges, Mr. Obama called those institutions "one of the great undervalued assets in our education system."

The measure signed last week provides $2-billion for job training at community colleges. A version of the bill that passed the House of Representatives in September had contained $10-billion for the institutions and would have financed a broader array of programs, including the colleges' efforts to meet the president's 2020 graduation goal.

Robert G. Templin Jr., president of Northern Virginia Community College, said he was disappointed by the drop in money devoted to community colleges in the final bill, but he still called the measure a "landmark piece of legislation." He said the bill was important both financially and symbolically.

"I hope it draws attention to the fact that America's community colleges represent one of our best resources for putting America's working class back to work," Mr. Templin said in an interview this week.

He said that the reduction in funds for community colleges could slow progress on some projects his college is involved in, which he had hoped the bigger pot of money in the earlier version of the bill might help finance. Those projects include a national work-force-training partnership between community colleges and Goodwill Industries International and a statewide effort in Virginia to increase rates of enrollment and completion for first-generation college students.

But Mr. Templin said the college did operate programs that would be potential candidates for the aid in the newly signed bill, including programs to assist out-of-work adults who need retraining and to help people transition from dying industries to emerging ones.


1. lllewis - March 30, 2010 at 03:59 pm

Since when does the President of the United States have the authority to tell a private company how and when to spend it's money? President Obama stating that money previously spent by Sallie Mae on lobbyists should have been spent on students is akin to him telling me how to spend my disposable income. He's pretty far outside of his purview with statements like that

2. tprestby - March 30, 2010 at 04:19 pm

In his role as spokesperson for the United States of America he has the "right" to say anything he wants whether one agrees or not. If private companies such as Sallie Mae and others who charge such outrageous interest to students started acting more ethically and responsibly there wouldn't have been such a need for this reform. For those of us depending on student loans, it's about TIME!

3. acasinc - March 30, 2010 at 06:25 pm

So now it is the Fedway or the Highway. Does anyone understand that this makes it almost impossible for start-up colleges, universities and vocational schools to fund their student tuition in the first 3-5 years before they can apply for accreditation and become a Title VI participant, which by the way costs over $50,000 paid to the organization plus staff money paid for developing institutional effectiveness plans, self-studies and the dozens of requirements plus the team visit. How is a start-up suppose to star-up without venture capital, which means someone who cares about profit versus education is calling the shots. Wake up America and intellectual liberals. Free enterprise is slowing being strangled by the Feds. Has anyone read the constitution lately? This is socialism folks and, to add insult to injury, it was "hidden" in a health care bill. What will King O do next?

4. 11132507 - March 30, 2010 at 07:55 pm

"Since when does the President of the United States have the authority to tell a private company how and when to spend it's money?" How about when lots of that money came from taxpayers? FFELP lenders have played the good old American ingenuity capitalist card when it seemed politically convenient, but sure did like that corporate welfare they were getting rich off of all those years.

If Direct Lending is socialism acasinc, you weren't paying much attention in poli sci class. And by the way, the first president to push for this program was that wild-eyed proletariat comrade, George H.W. Bush.

5. 11122741 - March 30, 2010 at 09:41 pm

"most significant since the GI Bill" ...god this guy is a fatheaded bragit in all he says and does...one of the worst I've seen in my 40 years in higher ed; talk about hype and hyperole

6. dbarron - March 31, 2010 at 10:16 am

11132507 please stick to what you know.
"the first president to push for this program was that wild-eyed proletariat comrade, George H.W. Bush"
The DL program started under Bill Clinton.
The evil private lenders the President is bashing are the same groups he is turning around and awarding contracts to service the Direct Loans. The only thing this program is doing is costing more money in the long run. There is no saving. The budget numbers for DL do not take into account all the private servicing contracts of the loans or all the vendor contracts the government pays to run the software, web application sites, and call centers to run the DL program. The only positive thing out of this is that students are getting more Pell funds...but if you believe the "savings" by switching to Direct are actually paying for this you are sadly mistaken. This will be lumped squarely on the backs of your children and grandchildren. There is no money to pay for it.

7. mpphillips - March 31, 2010 at 11:05 am

I know, instead of trying to shift educational funding out of the hands of corrupt corporations who out-source their call centers and collecting staff to second-world countries and sell and resell student loans to the highest bidder, let's continue bankrupting students and indebting them for a lifetime so that we can cripple the economy for future generations while the educational institutions sell football tickets and feign to educate. Let's continue building academic departments on the backs of unsupported adjuncts and part-time faculty who feel no allegiance and teach five classes each term. Let's see if that will prepare us to be competitive in a global economy where science, engineering, and critical thinking/reading will separate us from the pack. Let's keep doing what we're doing. After all, it's working so well.

Anyone who disparages Obama and favors continued corporate corruption needs to shut up and listen for at least a minute, and I don't mean to Glen Beck, Rush Limbaugh, or Sarah Palin. I shudder to think that my academic colleagues do so.

8. 11132507 - March 31, 2010 at 12:58 pm

dbarron, I am sticking to what I know. DL started while Clinton was in office, after Bush the Elder supported it but never got it to the top of his agenda pile. And as far as the service contract money, at least now Sallie and the others are actually going to have to do something in return for the money. Under FFELP, their job was to move other peoples' money around.

9. mescalerosun - March 31, 2010 at 02:08 pm

Maybe it's because entities participating in federal student loan programs have fiduciary responsibilities to the U.S. taxpayer that they have failed to live up to by engaging in activities that are questionable, unethical, even bordering on fraudulent. Oh, and by the way, Sallie Mae is just the tip of the sordid iceberg, folks. You think SLMA is ripping off the American taxpayer? Wake up! When is the Department of Education's Office of Inspector General going to start taking a long, hard look at the whole, sordid student loan industry, including so-called "non-profit" guarantee agencies.

For example, recently in the news, ECMC, Inc., a St. Paul, Minnesota-based corporation, was responsible for losing the personal data (including SSNs, DOBs, and addresses) of 3.3 million student loan borrowers. It reeks of incompetence. And it's also interesting to me that the above-referened loss of borrower data at ECMC happened a few years ago at FSA (at the Department of Education) under the SAME watch of people who are NOW at ECMC. (hmmmmmm.....Fox.....hen house). You do the math.

If the OIG had provided an ounce of detailed oversight of organizations like SLMA, ECMC, NELNET, TGA, etc., we wouldn't be where we are today: that is with organizations abusing the public trust and pocketbook by engaging in questionable, unethical, perhaps even fraudulent accounting activities. This smells just like the lack of oversight of Wall Street at the SEC.

10. lrobb - April 05, 2010 at 12:36 am

Better or nor remains to be seen. I for one am sick of the old way of student loans. I had 4 years of loans from the same bank. Now those 4 years of loans are sold to 4 different companies to whom I now owe 4 different monthly payments. By using the sane bank, I had hoped to consolidate the 4 loans and have only one payment.

11. jamccain - April 05, 2010 at 12:06 pm

If you look at money in the Education's Dept's control, you're talking about spending $130 billion in 2010 toward education in America. There has been an enormous boost in student aid and Pell Grant funding to support higher education. When it is all said and done, HBCUs will be better off under this administration than any administration prior. Great Job President Obama! It's time to overhaul the old America and create an United States of America that truly embrace equality and success for all. If that means a Socialist government, then BRING IT ON!

12. iucohio - April 06, 2010 at 09:21 am

To confirm above statements, it was George H.W. Bush who first proposed the Direct Student Loan program; it was Bill Clinton who was successful in passing it.

13. rdfisher - April 06, 2010 at 01:55 pm

Okay folks... lets get real - the fogs begining to lift. Tens of billions of dollars from the direct loan savings where needed to make the CBO budget number work for healthcare. That's why the community colleges did not get the $12B promised to them (and the $2B they did get was back loaded from the Dept of Labor for workforce training, only). The Pell grants did not get the amount they were projected for the same reason and the student loan interest earned over the next ten years was also plowed into the healthcare budget.

"The minoity serving institutions got all of their promised $2.55B and serve only 13% of U.S. undergraduates. "Their $2.5-billion allocation exceeded even the $2-billion set aside for [all] community colleges, which serve close to half of all undergraduates [in the U.S.]" (Minority-Serving Colleges Benefit From a Student-Loan Change They Fought, April 4, 2010, The Chronicle).

14. plan4it - April 06, 2010 at 05:09 pm

Why not spend $2 trillion on minority community colleges? Why stop at $2.55 billion? Better yet, why not just give every progressive, minority, union member a $100,000 tax credit per year and raise taxes on everyone else up to 95%? The worms who don't support the Dear Leader don't deserve their money anyway - they may have earned it by producing, fighting and dying for it but that's a small detail - what's really important is giving trillions to the exact same voters who elect the people who give them trillions. Yeah - that's exactly what the founders wanted but they were too stupid to make it happen until...200 yrs later... Barack Obama, a brilliant leader, cleaned up the mess left by Jefferson, Adams & Washington to "perfect" our union. God Bless You Dear Leader!

15. eliffmavi - April 30, 2010 at 07:22 am

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