Personal Finance

Obama: We have to make college affordable

Obama: 4 big questions we have to answer

In his final State of the Union address, President Barack Obama touched on the student debt crisis and emphasized the problem with college affordability.

"We have to make college affordable for every American, because no hardworking student should be stuck in the red," the president said Tuesday night.

"We've actually got to cut the cost of college. Providing two years of community college at no cost for every responsible student is one of the best ways to do that, and I'm going to keep fighting to get that started this year," he added.

It's not the first time the president has addressed student debt in his State of the Union addresses. In past speeches, he has called on Congress to stop student loan interest-rate increases, extend the tuition tax credit and boost the number of work-study jobs as well as asking colleges and universities to keep tuition costs down.

"We agree that real opportunity requires every American to get the education and training they need to land a good-paying job," he said Tuesday.

His comments, which were met with applause, came on the eve of an election year and at a time when student debt burdens have reached record levels.

"When we talk about education, we're blinded by what it was in the past — everyone thinks they are going to get out of school, get a job and everything works out," said Andrew Josuweit, CEO and president of Student Loan Hero, a student-loan management site.

But today, 79 percent of respondents in a Gallup-Lumina poll released earlier this year do not think that higher education is affordable for everyone who needs it.

At public four-year schools, costs for the 2015–16 school year rose to $19,548 from the $16,178 price tag five years ago,according to the College Board. Tuition plus room and board at four-year private universities was much, much higher: $43,921 on average.

Meanwhile, many new graduates are finding that they must do internships or other apprentice-type work before they land a full-time job, noted Rohit Chopra, a senior fellow at the Center for American Progress.

In turn, student debt has reached record proportions with $1.3 trillion in student loans outstanding. Forty-three million people in the United States owe some amount of student-loan debt, according to the center.

At the CNBC GOP Debate, Sen. Marco Rubio pointed to vocational schools as a lower-cost alternative to the traditional on-campus four-year college degree.
Where do GOP candidates stand on student loan debt?

Managing existing student debt and reducing the cost of college promise to be big issues for voters this year.

GOP candidates are also addressing the skyrocketing expense of higher education.

Sen. Marco Rubio, who said he had more than $100,000 in loans when he graduated from law school, has pointed to lower cost alternatives to the traditional on-campus four-year college degree, arguing that the U.S. should bring back vocational schools.

Donald Trump has said he is open to public refinancing of federal student loans and promotes job creation as a way to alleviate the debt burden for recent grads.

Ben Carson has said that holding universities accountable for the interest on student loans and only making students responsible for the principal of the loan would encourage schools to find a way to rein in the cost of a degree.

Jeb Bush has also touted more affordable online degree programs as an alternative to the four-year college experience.