3:54 P.M. EDT
MR. TOIV: We have Bruce Reed and Eli Segal to brief, answer your questions about the proposal the President announced today.Bruce is the President's Domestic Policy Advisor. Eli is the founding CEO of AmeriCorps and currently a board member. And here they are.
MR. REED: Thank you, Barry. Let me explain how this interest deferment works. What the President announced on "Face The Nation" is that we will propose legislation as part of the higher education reauthorization later this summer to enable students who agree to do service to essentially defer the interest on their college loans during that period of service. The federal government would pay the costs of the interest during their service.
This option is already available to a number of students who have subsidized college loans. We are -- the action that we are proposing would expand it to students who have unsubsidized college loans, which is about one-third of the college loans all together. Our estimate is that this proposal would cost about $7 million over the five-year budget window and provide an average benefit of $600 to approximately 12,000 student borrowers who agreed to do service.
Q Those numbers again?
MR. REED: $7 million, over five years; 12,000 students, average benefit $600. I think that adds up.
And the type -- the students would be -- service here would be defined as working for a tax exempt organization or teaching in low income communities.
Any questions?
Q Do they have to work for free to --
MR. REED: No, no. These are generally low income. But it's a form of --
Q Is there any income consideration at all?
MR. REED: Well, a couple different ways to repay your loans if you should decide to go back to college and go into a low income service profession. Because of what the President did in 1993, we now have income contingent loans, which any student could choose. And if you have an income contingent loan and you go into a low income service profession, you end up not paying very much interest anyway because it's a percentage of your income, and if your income is very low you wouldn't have much to pay.
But this particular provision is for unsubsidized loans. Many of these people would be earning an income, but it's a very low income. And so the government is essentially stepping in, recognizing their economic hardship, paying the interest on their loan for that period. And then they'll repay the loan once they go into another profession and are earning the money to pay it back.
Q How long can you defer for? Is there a set -- MR. REED: Up to three years.
Q And it would be $600 a year?
MR. REED: Yes.
Q Are the employees at the Departments of Transportation and Defense, who are going to do all this tutoring, is that during work hours and they'll be paid to take, like, an hour a week or a month to do it?
MR. REED: Different agencies have different policies on how mentoring and tutoring and volunteering will work during the work day. It's basically at the agency's option. I think the law requires that employees can only do paid service during the work time if it's related to the mission of the department. So, for example, the Education Department does allow employees to go and mentor in schools during the work day. And a lot of other agencies the employees will -- if they mentor for an hour during the day, they'll make up that hour over the course of the work week.
Q Bruce, is the loan program primarily, then, for students coming from upper middle class families if it's for those who are getting unsubsidized loans?
MR. REED: Middle class.
Q Middle class families?
MR. REED: Yes.
Q And this is a very different kind of program than AmeriCorps's; does this reflect some kind of changing or evolving philosophy?
MR. REED: Oh, not at all. This is, in addition to our continuing efforts to expand AmeriCorps, which has given 50,000 young people the chance to earn substantial college scholarships in return for full-time service. And as I said, we've taken other measures to make the cost of college -- to make borrowing for college easier.
This really just closes a loophole in the law, a difference between subsidized loans and unsubsidized loans, and the idea was inspired by Reverend Tony Campolo here in Philadelphia, a minister who wants to encourage service and brought this general idea to the President's attention earlier in the year.
Q Why so few opportunities? Twelve thousand over three years is not very many.
MR. REED: That's just our estimate of the number of people who would go into service. It could turn out to be higher if there's a greater response.
Q Could you explain, Bruce, what the President was referring to in the interview when he talked about -- he indicated that these would be people supported by their religious congregations in some way?
MR. REED: I think that -- I may have to get back to you on the specifics of what Reverend Campolo intends to do.
Q I'm talking about the President's comments in the interview that he did.
MR. REED: In the "Face The Nation" interview. He was talking about Campolo. But in general, these are students who would be doing service with tax-exempt, nonprofit organizations. It could be religious organizations, it could be teaching in low-income as I said, and if they're making a salary, it would be provided by the organization they work for.
Q Bruce, let me just get this straight. So the government would pay the interest, correct?
MR. REED: Yes.
Q For the student loan?
MR. REED: Yes.
Q You say for up to three years?
MR. REED: Yes.
Q And --
MR. REED: Because this is a loan deferment, so it's not paying down the principal on the loan, it's just paying the interest over the period while the loan is being -- while repayment of the loan is being deferred.
Q Secondly, the other question, which I can't remember right now. I'll get back to you --
Q How is he proposing this, exactly? This is going up in what form to Congress? Or is this part of the budget process?
MR. REED: This summer we will propose reauthorization of the Higher Education Act, and it will include a provision on this, so this is something that would impact with the FY '99 budget.
Q And do you have any support in Congress for this already, Bruce?
MR. REED: No, just proposing this idea, and the legislation would go forward sometime in early summer.
Q Do you think you have any support in Congress for this kind of legislation?
MR. REED: I can't say for sure, but I think this is the sort of idea that would be relatively noncontroversial and could attract bipartisan support.
Q On the announcement today about the Department of Defense and Transportation tutoring, do you have any idea what the baseline is between how many they tutored in the last four years?
MR. REED: Do you know?
MS. FORTUNA: No, I don't. I don't have a clean baseline. They probably do 600,000 at the Navy; I don't know how many in the Army.
MR. REED: So the incremented Navy is 100,000.
MS. FORTUNA: One hundred thousand a year. And I don't know about transportation.
MR. REED: James, you probably have an early deadline, but what Diane has said was that they already have -- the Defense Department already has a magnificent mentoring and tutoring program, and I believe that the Navy already mentors something like 600,000 a year, and they're committing to increase that to 700,000.
Q This is for full-time volunteering, full-time community service?
MR. REED: No, The Defense Department or the other one?
Q No, I'm sorry, I'm back to the other, the students.
MR. REED: Yes, these would be people who are doing this as a profession.
Q Can you give us any idea for how many more children will be tutored as a consequence of what the President said today than were tutored in the last four years, or do we have any notion for what difference this actually makes?
MR. REED: Well, as I said, it's 100,000 additional children as a result of what the Navy is doing. I believe that the Department of Transportation initiative is a completely new initiative. So --
MS. FORTUNA: It's not only tutoring, it's tutoring, mentoring, education --
MR. REED: But it involves tutoring, mentoring and some kind of education efforts as well. I think you'd be safe to say our hope is that it would help upwards of a million more children than otherwise would have gotten help.
Q Did those departmental staffers or workers do the mentoring and tutoring on their own time or on government time?
MR. REED: Well, as I said earlier, agencies have the option of either giving time off during the work day to go do this on a paid basis if it's related to the mission of their department. But in most cases, these are employees who take an hour during the work day and then make it up elsewhere during the work week.
Q Bruce, several of the corporations who are represented here say they've got people who are coordinators for the companies to help make it easier for employees to know what's out there as far as community service. Does the White House have such a thing or is it contemplating it?
MR. REED: For the administration as a whole or just within the White House?
Q In the White House.
MR. REED: We don't have one now, John.
Q All right. Is there any possible -- or a contemplation of on-site volunteer opportunities? That's another thing that the corporations were touting.
MR. REED: Well, that is something that works -- something that works very effectively in the private sector. And some of the agencies may be looking at that -- in other words, bringing the kids to the sites. We don't have that in mind at the White House. They'd have to stand in line a long time at WAVES.
Q They might be foreigners, in which case they would take a long time at the gate. (Laughter.)
Q Bruce, can you tell us anything about what else was happening this afternoon away from the stadium? I mean, were the other Presidents also out cleaning up trash and painting over graffiti?
MR. REED: I think everybody had on t-shirts and was out painting. I don't know which color t-shirts they were wearing or whether they were using the same color of paint, but all the principals were taking part in the effort.
MR. TOIV: Any AmeriCorps questions? Any related for Eli?
Q Did you talk -- I just walked in, I'm sorry. Did you talk about what dollar figure on average we're talking about these kids saving if they volunteer for a year?
MR. REED: As a result of the President's income --loan deferment proposal, it's an average benefit of $600. AmeriCorps, which is -- well, Eli can talk about better than I can, but AmeriCorps gives college scholarships of $4,725 in return for a year of full-time service.
MR. TOIV: Is that it?
Q I have a question for Eli. Is -- the mood of this summit seems to be very pro-volunteering and kind of not pro the kind of AmeriCorps service that's paid for and is somewhat expensive. Do you think that in the end it will be hard on AmeriCorps -- that Americans will start thinking, well, we have all these new volunteers. We don't need AmeriCorps anymore? MR. SEGAL: On the contrary, Elizabeth, I see this as a logical extension of AmeriCorps. AmeriCorps was built on several principles. One of them was the idea of public-private partnerships. Through the life of AmeriCorps -- three years -- we have seen extraordinary commitments in the private sector already. In its first year alone, there's an audited report which shows more than $40 million committed by the private sector, usually in the form of cash, to support the AmeriCorps programs in the United States. This kind of ramps it up one level more, continues to make the case that AmeriCorps plays a vital role. Certainly, you will see lots of young people in AmeriCorps here in Philadelphia. They're in lots of the delegations.
And we believe that all people recognize that volunteerism -- we're not going to simply celebrate volunteerism this week, but we have to rely on volunteers more than we have in the past. And it's unquestionably the case that AmeriCorps is the crucial link or at least one of the crucial links in making volunteers operate more effectively. We're awfully proud in AmeriCorps of the fact that for every one AmeriCorps who serves, there are 12 new volunteers. It's the reason why some of the great volunteer organizations, from the American Red Cross to Habitat for Humanity, are such extraordinary supporters of our work.
MR. REED: Thank you very much.
THE PRESS: Thank you.
END
4:10 P.M. EDT
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