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More Students Defaulting on College Loans; Economy Not Drastically Affecting Jazz Fest; Pentagon to Release New Photos of Prisoner Abuse; Small Plane Lands after Entering Restricted Airspace in D.C.; President Barack Obama Speaks on Education and Student Loans
Aired April 24, 2009 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: I hope you're saving money for your kids' college. We are pushing forward on the high cost of higher education. Going to college often means going into debt. President Obama wants to give credit where credit is due.
(BEGIN VIDEO CLIP)
MASIKA BERMUDEZ, MOTHER: He was a nice little boy. He loved to dance. He loved to have fun. He loved to make friends. And all he made there were enemies.
(END VIDEO CLIP)
PHILLIPS: Jaheem Herrera will never go to college or even high school. He took his own life at age 11. His family says he was bullied to death, and he's not alone.
Hello, everyone. I'm Kyra Phillips live at the CNN world headquarters in Atlanta. You're live in the CNN NEWSROOM.
We begin with millions of U.S. college students getting their first hard lesson in economics long before they take their first class. It comes when they try to get loans, grants, scholarships, or all of the above.
Loans in particular are a burden on students and their families, and as you may well know, well, they also cost taxpayers billions of.
President Obama says it's time to change course. And this hour he's pushing to scrap the federal program where the government pays banks to lend students their guarantees of those loans. The president wants the government to lend to students directly. That already happens, but the private program is much bigger.
The Congressional Budget Office estimates that a switch to direct loans could save taxpayers $94 billion over ten years.
And don't forget: the president outlines his student loan overhaul, 1:30 p.m. Eastern Time. You'll see it live right here in the CNN NEWSROOM.
And we're five days away from the end of the president's first 100 days in office. We want you to grade the leaders that you've elected last November as part of our prime-time national report card. It kicks off next Wednesday night, 7 Eastern, leading up to presidential news conference at 8 p.m. And after that, our special coverage continues on CNN and CNN.com.
And another government loan for General Motors: $2 billion more of your dollars to tide the company over while it scrambles to meet a June 1 deadline to restructure or else.
In hopes of cutting costs, GM is planning extended summer shutdowns anywhere from three to 11 weeks at several of its U.S. and Mexican assembly plants.
Chrysler has got just six more days to hammer out a deal with debt holders, union workers and the Italian car builder Fiat. And it may wind up in bankruptcy anyway.
Ford is a relatively successful story. In the first quarter it sold more than analysts expected and lost less: $1.4 billion. The company says that it's comfortable it will get through 2009 with no need of government aid.
Well, 2010 is another story. But Ford is hoping to break even or even make a profit in 2011. Ford CEO Alan Mulally just spoke today with CNN's Poppy Harlow. He says smart planning is really paying off.
(BEGIN VIDEO CLIP)
ALAN MULALLY, CEO, FORD MOTOR COMPANY: So we also borrowed extra money to have a cushion for this situation. And clearly the run rate right now is around ten in March. And we think that, over the year, we'll be at the lower end of our range, which was 10.5 to 12.5.
And so we have sufficient liquidity for that. And also, we have sufficient liquidity that, if it dropped down below that, we believe -- and we continue to take action to improve our cost structure. So we think we have significant liquidity to continue the investment in new products that the people really do want in value.
(END VIDEO CLIP)
PHILLIPS: Now, Poppy is going to join us live with more of that interview coming up in our next hour.
Taking a look at the big board right now, Dow Industrials up 135 points as we get ready to head into the weekend.
Well, remember those Abu Ghraib prisoner abuse photos and the foreign policy nightmare that they put the U.S. through? Well, we might relive it again.
The ACLU says that the Pentagon will release more photos showing alleged abuse at prisons in Iraq and Afghanistan. Abuse that goes far beyond the walls of Abu Ghraib.
Let's get straight to our Pentagon correspondent, Chris Lawrence.
Chris, do we know how bad the pictures are? And will they be anything like we saw coming out of Abu Ghraib?
CHRIS LAWRENCE, CNN CORRESPONDENT: Well, some defense officials say that they aren't as bad as that. But again, you have to put that -- that's a very subjective term when you say how bad? It depends on who's exactly looking at the pictures.
And you have to frame it within the context of we've always now seen these photos from Abu Ghraib for several years now. So any photos that come out now will probably be measured against that.
PHILLIPS: Is there a worry? Because we saw it last time, Chris, that once these photos are released it's going to create even more anti-American sentiment in the region. I mean, remember the protests. Remember the violence sparked from the photos.
LAWRENCE: Yes, of course. You know, some officials have already expressed that worry. You know, we're talking about 60 investigations. We're told that the release will contain hundreds of photos, you know, not just the 40 that were talked about at first. But this will be hundreds of photos that will be released all at once, probably by late next month at the absolute latest.
But again, even Secretary Gates spoke to this yesterday when he talked about agreeing to this release that, say, although his primary concern was to, you know, protect the integrity of what happened, he also said that he really wanted to get to the point of worrying about its impact in the Middle East and what potential impact it could have.
PHILLIPS: All right. Chris Lawrence, appreciate it.
And you probably heard just a few minutes ago about that aircraft that had entered into restricted airspace.
Jeanne Meserve on the phone with us right now.
It has come to an end, but the aircraft has now actually landed, Jeanne?
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (via telephone): Hi, Kyra.
Yes. We have been told that this aircraft is now on the ground in Indianhead, Maryland. According to a worker at that airport, it was escorted in by two F-16s and also two U.S. Coast Guard helicopters.
Right now, we're told, those helicopters hovering over the aircraft, which is on the ground right now. Local law enforcement are talking to the pilot.
Apparently, this individual entered into the airspace, the restricted airspace over Washington, D.C., from the northeast, and that's what caused the alarm. But we're told by the Department of Homeland Security that the pilot was compliant when he realized he was where he shouldn't be. He turned around and was escorted out and has put down on the ground. These sorts of things do happen from time to time. They used to happen a lot more when there was a more complicated footprint for this restricted airspace over Washington. They've tried to simplify that. They did a massive education campaign. But these things happen particularly at this time of year when a lot of people go up to enjoy the good flying weather, and it often happens with pilots who are not from this area of the country.
We have to wait and see who was piloting this aircraft. We're told it's a Cessna 180 that entered the Washington airspace today and got everything revved up, at least for a little while. But right now, all clear -- Kyra.
PHILLIPS: All right. Jeanne Meserve, appreciate it.
Now, this is a story that we have really tried to push forward and try and get some answers. The U.S. Army on a new mission to keep soldiers from killing themselves.
Apparently, top Army brass has now approved a new plan to stem a surge of soldier suicides. Earlier reports say that the plan includes hiring more mental-health workers and tightening lax drug testing and health screening procedures.
There were a reported 56 soldier suicides in the first three months this year. They were -- there were 140 for all of last year, and that was actually a record.
Repeated tours of duty in Iraq and Afghanistan have been cited as a likely cause for that increase.
Well, it's chilling and it's sickening and completely unacceptable. Within a week and a half, two 11-year-old boys driven to commit suicide, both enrolled at new schools, both bullied and taunted, labeled as gay. That second tragedy happened just down the road in a suburb here in Atlanta.
CNN's David Mattingly reports.
(BEGIN VIDEOTAPE)
DAVID MATTINGLY, CNN NATIONAL CORRESPONDENT (voice-over): Take a look at this picture of a smiling, seemingly happy young boy, and know that everything it implies about him was wrong.
MASIKA BERMUDEZ, MOTHER: He was acting strange. He didn't want to eat, you know? And that last day I saw him alive, he didn't -- he doesn't want to go to school.
MATTINGLY: Eleven-year-old Jaheem Herrera moved with his family from his native U.S. Virgin Islands and started at this elementary school outside Atlanta in August. He got good grades, liked to draw, and was excited about making new friends. But that's not what happened.
BERMUDEZ: He was a nice little boy. He loved to dance. He loved to have fun. He loved to make friends. And all he made there were enemies.
MATTINGLY: Friends and family say bullies at school targeted Jaheem because he was from somewhere else and spoke with an accent. They called him names, and once attacked him in the restroom. One childish slur in particular affected him deeply.
(on camera): What words seemed to hurt him the most?
BERMUDEZ: Gay. He used to always say, "Mom, they keep telling me this gay word, this gay, gay, gay. I'm tired of hearing them, telling me the same thing over and over."
MATTINGLY (voice-over): His mother said the taunting became so bad, the unthinkable happened. Jaheem came home from school one afternoon and went up to his room. She found him hanging by a belt in his closet.
UNIDENTIFIED FEMALE: His death is not in vain, Lord.
MATTINGLY: Jaheem's suicide comes less than a month after another 11-year-old killed himself in Massachusetts, after relentless bullying.
Experts say, everyone should be alarmed.
DR. ELIZA BYARD, EXECUTIVE DIRECTOR, GAY, LESBIAN AND STRAIGHT EDUCATION NETWORK: I think that it really is a wakeup call to everyone, to all concerned adults, to really treat bullying as the serious public health issue that it is.
MATTINGLY: Jaheem's mom says she complained multiple times to school officials, but the bullying never stopped. Other parents tell CNN they complained about bullying, as well.
After Jaheem's death, the school board expressed condolences, saying the school staff "works diligently to provide a safe and nurturing environment for all students."
(on camera): Allegations of such severe bullying surprised experts who are familiar with the school's system. Its anti-bullying program was considered exemplary. There are special activities designed to raise awareness. There are specially-trained staff at every school. And students are even expected to sign anti-bullying pledges.
But none of this was of any help to Jaheem.
(voice-over): And in spite of recent strides made in awareness nationally, studies show that 65 percent of teens are being bullied each year. And most believe adults can't help them.
(on camera): They reach out to adults. They don't think the adults are doing enough?
JOEL MEYERS, DIRECTOR, CENTER FOR RESEARCH ON SCHOOL SAFETY: They may or may not reach out to adults, but they feel like not enough's being done.
MATTINGLY: His mother believes Jaheem gave up because all their complaints failed to protect him. She has taken her other children out of school and plans to return to St. Croix, where she says they were always safe from bullying.
David Mattingly, CNN, Atlanta.
(END VIDEOTAPE)
PHILLIPS: Well, Jaheem's story isn't over, though. The DeKalb County district attorney is looking into his suicide. That D.A. is going to join us live, straight ahead.
(COMMERCIAL BREAK)
PHILLIPS: Well, look at that. Tall order for firefighters in South Carolina. It's what -- the worst wildfire there in some 30 years, looks like. We're going to check in on how long that fight's been going.
(COMMERCIAL BREAK)
PHILLIPS: We mentioned that aircraft that entered restricted airspace in Washington D.C. We just got some video in on when that happened, how it affected the Senate as it was active on the floor. It stood in recess.
Here's what happened.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: ... of GDP. Yes.
SEN. ROLAND BURRIS (D), ILLINOIS: We're in emergency. The Senate stands in recess, subject to the call of the chair. Please await further instructions from the Capitol Police.
UNIDENTIFIED MALE: Well, that's the balance of report. OK.
UNIDENTIFIED FEMALE: Everybody, I am Officer Cumberlander (ph) with the United States Capitol Police. Right now we are investigating an aircraft that is in our restricted airspace at this time. Right now we are doing nothing. We're not evacuating.
As soon as I get the word in my ear, I will let you all know. Once I do that, I need everyone in the gallery to look at the officer at the doors and evacuate the Capitol immediately.
(END VIDEO CLIP)
PHILLIPS: Considering 9/11, that's got to send chills down anyone's spine when you get that kind of announcement. That was the Senate floor there, standing in recess while that aircraft had entered into restricted airspace. But as we reported, our Jeanne Meserve, actually, reported for us, the F-16s were launched, brought that aircraft down. Still trying to find out who the pilot was, why it entered restricted airspace. But everything is good. It's got the all-clear right now.
Well, how would you like to be inside the lightning rod when the bolt strikes? That's kind of where some FAA workers were when the tower at Atlanta's airport got zapped, an actual direct hit. They smelled smoke, got out for about half an hour. Everyone and everything is OK.
The control power, by the way, is 398 feet high. It's the tallest one in the country. And it was just too tempting a target during a storm last night.
Forest fire chief in South Carolina says that someone burning debris from their yard caused the state's worst wildfire in some 30 years. It's already damaged or destroyed 170 homes and could get even worse. A lot depends on the weather, too.
Reynolds Wolf, that's his department.
The ocean breeze we usually love is a bit like a conspirator here.
REYNOLDS WOLF, AMS METEOROLOGIST: Yes, it really is. I mean, think about a blacksmith and making a horseshoes and using the bellows. And it pushes the air. It really fans the flames. That is essentially what's been happening along the coast.
I want to show you the rest of America, this weather situation we have right along the coast, Kyra. You can see this area of high pressure. That has a compressing effect on the atmosphere. So in terms of precipitation, they're not going to get any relief today at all. And with the very dry conditions and with that wind coming in, it's going to help fan those flames.
Think about that for just a few moments, what these guys are going to be dealing with, the firefighters. I mean, when they're out there and they're working in this stuff, their visibility is hampered, obviously, by the smoke. What they breath, they're breathing in that nasty smoke at the same time. And the fires in excess of 1,400 degrees Fahrenheit.
We're going to zoom into a couple of locations. Obviously, along the coast. You've got, of course, the barrier islands. You've got parts of 17. And then back over in this area you see the fires that have been popping up right along this stretch of roadway. With the breeze that continues to come in right off the coast, it is going to cause those flames to fan.
Speaking of that, take a look at some of the damage we've got. We're going to roll this video for you. You see at this point just very little in terms of many of the houses. Just the bricks left. A few driveways. Again, you see even parts of the concrete have been crumbled up because of the intense heat. The driveways, the siding, all melted due to the incredible heat.
We've got a great idea of how long this is going to last in terms of the dry conditions. Unfortunately, that's going to be for much of the weekend. So you're going to be seeing possibly more of this play out. The tall flames as far as you can see just along the coast with that thick smoke.
We have got with us Brian Mims this time. Brian is from WRAL.
Brian, can you give us now an idea of what the homeowners are dealing with and also how the firefighters are handling this incredible stress?
BRIAN MIMS, REPORTER, WRAL: Well, you just pointed out the weather and, aside from the fire, it's a beautiful day at the beach. The sun is shining. The humidity is low. And winds are picking up a little bit, possibly to 15 miles per hour this afternoon. Not the kind of forecast firefighters want to see in battling this fire.
At 10 a.m. today the rest of the residents of the Barefoot Resort community were allowed back to their homes. Those residents who live West of Highway 31. That's basically ground zero for this fire. That's where most of the homes were damaged or destroyed. About 70 homes flattened in that part of the Barefoot -- Barefoot Resort community.
Those residents got in there today to see the devastation that was wrought by this wildfire. Only residents are allowed there right now. The media and some others will be allowed into that area this afternoon at 4 p.m.
But many residents were greeted by utter destruction, seeing their homes flattened; nothing but rubble and debris and concrete slabs. So you can imagine the fury of emotions, the mix of emotions they're having to grapple with as they see their homes in ruins.
WOLF: No question about it. Well, Brian, thanks so much for your help. We're going to let you go back and certainly take it easy out there. Certainly a dangerous situation.
As you can tell, Kyra, I mean, this is going to be something they're going to be dealing with through a good part of the weekend. With this area of high pressure that's just sitting up over the coast, we're expecting very little change in your forecast for the rest of the day, tomorrow, possibly as far into Monday.
That's the latest we've got for you. Let's zoom back to the news desk.
PHILLIPS: All right, Reynolds. Thanks.
Check out this tease. This is pretty cool stuff. It went into Lake Michigan as a relatively new plane. Well, it comes out a valuable piece of history destined for the World War II Museum. You'll be amazed how good it looks after all these years.
(COMMERCIAL BREAK)
PHILLIPS: Well, when we saw this video, we couldn't help but think this plane looks pretty darn good. After all, it's been on the bottom of Lake Michigan for 65 years. The last time this naval dive- bomber saw the surface, World War II was still going on. It actually sank during pilot training and was brought up just today.
And after a big makeover it's going to go on display at the National World War II Museum in New Orleans.
Taliban militants reportedly backing off in Pakistan today. A major new development in a story that set off worldwide alarms about one of America's key allies in the war on terror.
A Pakistani government official tells CNN that the militants have now pulled out of the Buner district, just 60 miles from the capital city. The Taliban took over the district this week, imposing Islamic law, and sparking fear that Islamabad could come under attack.
Pakistan had deployed troops, saying the Taliban land -- land grab, actually, violated a recent peace deal.
Standing trial in a hostile land. North Korea says it will try two American journalists, accusing them of entering the communist country illegally and planning, quote, hostile acts. Current TV's Laura Ling and Euna Lee were arrested March 17 along the China/North Korea border.
Journalist advocacy groups accuse North Korea of using the two as political pawns in a broader dispute with the U.S.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Free Roxanne! Free Roxanne! Free Roxanne! Free Roxanne!
UNIDENTIFIED FEMALE: Free Roxanne! Free Roxanne! Free Roxanne! Free Roxanne!
UNIDENTIFIED MALE: Free Roxanne! Free Roxanne! Free Roxanne! Free Roxanne!
(END VIDEO CLIP)
PHILLIPS: Well, chants of "Free Roxanne" at Northwestern University outside Chicago. Journalism students demanding the release of Northwestern graduate Roxanna Saberi, who's sitting in an Iranian prison right now.
After a one-day, closed-door trial, Saberi was convicted last week of spying for the U.S. and sentenced to eight years behind bars.
The 31-year-old grew up in Fargo, North Dakota, and moved to Iran six years ago as a freelance reporter. President Obama has called for her release and says she is no spy. But Iran's president has not stepped in, saying he does not pass judgment on court cases. (BEGIN VIDEO CLIP)
MATTINGLY: What words seemed to hurt him the most?
BERMUDEZ: Gay. He used to always say, "Mom, they keep telling me this gay word. Gay, gay, gay. I'm tired of hearing them telling me the same thing over and over.
(END VIDEO CLIP)
PHILLIPS: Well, that grieving mother today flying back to her native Virgin Islands to bury her 11-year-old son, Jaheem.
You've just seen David Mattingly's -- Mattingly's report, and it talked about how Jaheem hung himself after classmates tormented him. They called him gay.
Gwendolyn Keyes Fleming is a concerned mom, but she's also the DeKalb County district attorney. She's looking into this little boy's tragedy.
And that was really my first question. I mean, here you are, a mom in addition to a D.A. This must have been one of those cases that just tugged at your heartstrings.
GWENDOLYN KEYES FLEMING, DEKALB COUNTY D.A.: It's incredibly heartbreaking. And I think it would be for anyone in our community, but particularly for parents, just to know that our children get to the point where they think there's no other option other than to take their lives. That really says something about where we are as a community. I want to make sure that we do everything we can to prevent this from happening.
PHILLIPS: So tell me what you're going to do. Are you going to pursue some type of criminal action? Or are you just taking your background as D.A. to investigate other avenues on how to prevent this? What's your game plan?
KEYES FLEMING: Well, at this point we're really just trying to gather the facts in order to make those decisions that you're talking about.
PHILLIPS: There could be criminal action?
KEYES FLEMING: Well, we're waiting to see. I've done some research regarding the laws that would apply. Bullying does not have a separate statute here in Georgia. It is usually covered by things like simple battery charge or simple assault charge.
And so we really need to have a clear understanding of what all of the facts are.
We've not had a chance yet to speak to Jaheem's mom. Obviously, she's going through a terrible time. And we want to make sure we give her the space that she needs. But that is really -- once we get a chance to talk to her, we'll really have a better understanding of where we are and where we're able to go.
PHILLIPS: Yes, because apparently, mom complained to the school district, I think five, six, seven times, you know, saying that her son was coming home in tears, saying, "They're calling me gay. They're bullying me."
And so let me just lay out some questions with regard to the law that you've been investigating. Number one, could the parents be held responsible somehow? Could there be -- could the possibility be there that parents could...
KEYES FLEMING: Are you talking about the parents of the children?
PHILLIPS: Of the children who bullied Jaheem.
KEYES FLEMING: Well, really, the statutes are put in place for the ones that actually do the action. Whether it is the hitting or threats or name-calling, those types of things. So again, I doubt very much at this point that any parents would be charged in any way.
PHILLIPS: But the kids could be?
KEYES FLEMING: We're going to wait and see. I don't want to make any prejudgments.
PHILLIPS: Right.
KEYES FLEMING: We want to make sure we have the facts. And certainly, I've heard the mom say that there's been allegations that there was bullying and name calling related to whether -- calling Jaheem gay and those types of things. So there might be some sort of hate crime element in all of this.
PHILLIPS: Interesting.
KEYES FLEMING: So we'll need -- we need to know the facts in order to be able to figure out which laws would apply, if any.
PHILLIPS: Got it. And then hate crimes, boy, that's a whole sticky area, legal-wise.
OK. Let me ask you about this. I was reading that two years ago that DeKalb, your county, that the public schools adopted this anti- bullying program called No Place for Hate. And apparently, at Dunaire Elementary, where Jaheem went to school, every student, teacher and staff member signed this anti-bullying pledge.
So the kids that were bullying him, could they have actually signed this pledge? And what does that tell you about the effectiveness of this program?
KEYES FLEMING: Well, and those are some of the things that we are -- we're in discussions with the school system already. I've spoken with one leader at the school yesterday, as a matter of fact. And so we're still in the fact-gathering stage. We certainly want to get copies of those documents.
But at this point we don't even have anybody identified as a bully. So obviously, in order to pursue any kind of charges, that is the very first step that we would need to take.
And if it gets to the point where no one specifically, or we can't identify a specific actor, then we'll go back with the school system and really look at this policy and see if there's something else we need to do to tweak it to make sure people understand the seriousness of what we're talking about.
PHILLIPS: Let me just make sure, because Dale Davis, who you know, DeKalb County School spokesperson, said that "the school system will review how its schools deal with bullying, how staff is trained, because of this case's seriousness. We're going to convene with the counseling staff to go over things and make sure protocol and policies are being followed."
In any way, shape or form, could the school district, say the superintendent, the principal of the elementary school, could any of one of these individuals be held accountable?
KEYES FLEMING: Not based on the research that I've done with respect to the available laws. I think the -- DeKalb already has a policy in place. If it did not have a policy in place, I think the ramifications would be they would not be eligible for certain federal funding.
Since they have a policy in place now, I doubt there will be anybody that will be held criminally for any kind of activity at the school system level.
But really, I know we're talking about crimes and that type of thing. But, certainly, as a mom and a member of the community, my goal, beyond just looking to see if there's a crime, is to figure out if there's a way we can prevent this from happening in the future. So even if nothing comes out of this, we want to make sure that we're forward thinking to protect all of our kids.
PHILLIPS: Absolutely. Because we've all been through it. I don't know about you, but I remember getting bullied.
KEYES FLEMING: I did, too.
PHILLIPS: Yes. You know? We can all relate to this.
Gwen Keyes Fleming, I'm really glad you're taking it real seriously. We want to stay up on this and follow up.
KEYES FLEMING: Thank you.
PHILLIPS: We really appreciate it.
KEYES FLEMING: Thank you for having us.
PHILLIPS: All right. Be my pleasure. All right. We're still waiting for the president of the United States to speak. Here is that live picture. We will take it when he steps up to the mike.
You know, we're talking about millions of U.S. college students pretty much getting the first hard lesson about student loans. We're talking about loans, grants, scholarships and burden that it places on families.
President Obama says he's going to do something about it. We'll take it live when he steps up to the mike.
(COMMERCIAL BREAK)
PHILLIPS: All right. Home loans and consumer credit card debt aren't the only kinds of consumer debt to generate interest at the White House. We are expecting to hear any second now from President Obama as he steps up the mike here. He wants to overhaul the federal student loan program. He wants to cut government subsidies for private loans in favor of direct government loans.
We'll listen in when he starts his remarks and talk about difference between the two and how much it could save you, the taxpayer, the parent, even the student.
Well, as tough as it can be to borrow cash for college, paying it back can be worse. CNN's Gerri Willis joins me with that.
So, Gerri, what if you can't pay?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, hi there, Kyra.
More and more students are having trouble making their payments. In 2003, 4.5 percent of students defaulted on loans. But according to stats from the Department of Ed, almost seven percent are defaulting now.
And if you're afraid you may not be able to make your federal loan payments, talk to your lender first. That's job number one. There are programs out there that can help.
Let's take a look at your options. They are forbearance and deferment. Look, in both cases, you can stop making payments for a little while. The debt doesn't go away, but interest does continue to accrue even if you don't make payments. There are also repayment options available if you're looking for more permanent solutions to big-time student debt. Go to finaid.org for more info -- Kyra.
PHILLIPS: All right, what about loan forgiveness?
WILLIS: All right, well, this is the big one. Uncle Sam will forgive some of your student loans if you volunteer that is, say, in the Peace Corps or AmeriCorps. Even loans for law school or med school can be partially forgiven. For information on loan repayment systems for law schools, go to the American Bar Association's Web site, abanet.org. And for more information on loan repayment for medical school students, go to the American Association of Medical Colleges at aamc.org -- Kyra.
PHILLIPS: All right, so, I'm curious. And I'm going to put you on the spot. Have you heard of studentaid.education.gov?
WILLIS: Studentaid.education.gov. Well, that would be a government Web site. There are lots of government Web sites out there. And as you know, the Department of Education probably has the best Web site for finding out about what the feds are going to do.
And we continually recommend lots of Web sites in this category for people to figure out what's going on. Because it's hideously complicated out there, and it's continually confusing kids and parents because there are so many different options. Finaid.org is one of our favorite Web sites out there.
PHILLIPS: All right, well then that one I'm going to show next. I just wanted to check and see if you knew the studentaid.ed.gov. The Department of Education set it up as a Web site where you can actually get free information on financial aid for college, Gerri.
We want to give folks just a look here at the Web site. And we found two parts on this Web site that were pretty fantastic. If you come down here for applying for financial aid, funding your education, pop up on that. And first at the top, it says, "What's the newest grant out there?" Well, today, it's a new grant out there for teachers who want to apply to get funds to go back to school. And if you come down a little farther, it talks about how we can make your education more affordable.
And then this is new, too, Financial Aid Estimator Tool. And you basically type in, and it helps you calculate your eligibility for federal financial aid, including grants. It tells you how to reduce the time of paying back. It's fantastic.
Then in this other part here, if we go back to the front, repaying your loans. Of course, once you get the loan you're stressed out your whole entire time through college and how to pay the money back. I don't know about you. but it took me about a decade to get that all paid back.
Here it talks about repaying your loans, what you need to know about repaying student loans, six months, nine months. It has exit counseling, which is great, somebody you can talk with, meet with before you graduate, getting your loan information if maybe you have lost it. And then a whole section here on paying back your loan, all your options on how you can do it, your grace period, et cetera. Fabulous tool we found here, studentaid.ed.gov.
Well, this programming reminder, President Obama wraps up his first 100 days in office in five days. We want to grade the leaders that you elected last November as part of our prime-time "NATIONAL REPORT CARD." It kicks off next Wednesday night 7:00 Eastern, leading up to the presidential news conference at 8:00 p.m. Eastern. After that, our special coverage will continue on CNN and CNN.com.
Well, the sights and sounds of Jazz Fests past. Oh, yes. You can't get enough of that music. But can the event still lure in the big crowds to the Big Easy in such a sour economy? We're going to tell you.
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PHILLIPS: Well, even though they started losing sponsors, the folks behind the New Orleans Jazz Fest played it cool. But with Americans' money woes growing, organizers have got to be worried about their crowds shrinking.
CNN's Sean Callebs joins us now live from New Orleans.
I'll tell you, Sean, they had no problem for Mardi Gras. What about Jazz Fest?
SEAN CALLEBS, CNN CORRESPONDENT: You know, you're right. And it is something that they're aware of, something they were concerned about. But, you know, they can plan the acts, they can plan on the food, but they can't plan on the weather. So, far it's cooperating, and that is huge. That could have a big, big payoff in the next couple weeks.
Some important numbers for you. They expect about 400,000 people to turn out if this weather holds up. And about 40 percent of those people are from outside the state. So, they're going to bring their tourism money here. That is significant. The number one market, New York. Number two market, California. And 10 percent of the people who come here are from overseas. So, that is significant as well.
And what do they hear? Well, they hear local acts like Dave Egan and 20 Years of Trouble on the main stage behind me now. Eight-eight percent of the bands that play here, local. Edge (ph) told me a couple years ago anyone who makes a living in music owes a debt to this area, and we can see why. It really all began here.
And we talked to Quint Davis, the organizer, the founder of Jazz Fest, began 40 years ago. And he said, yes, they were aware that this year there could be some troubles. Listen to how he talks about the economic concerns.
PHILLIPS: All right, it looks like we don't have -- sorry about that, Sean. We don't have it. We'll try and get that sound for you. Tell me what he said.
CALLEBS: Well, he said that, you know, people are aware about the economic concerns. They were somewhat worried about it, but the hotels were sold out, many of them a year in advance. And the good thing is, this is a show that runs all day and ends at dusk. So once the tens of thousands of people leave here, they pour into the city, and they spend money there.
We're talking to some of these people, and here's somebody who's out spending money.
FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hi, Kyra. Funny, funny, funny. CALLEBS: Fredricka Whitfield, your little buddy, Kyra.
WHITFIELD: How you doing? Kyra, this is all you. You should be out here. Are you kidding me?
PHILLIPS: I tell you what, I wish.
WHITFIELD: Good music, good fun, great crowd.
PHILLIPS: I love it. Fredericka Whitfield, ladies and gentlemen, our weekend anchor.
WHITFIELD: I'm having a good time. It was nice to run into you guys out here.
CALLEBS: But you have to be -- but you'll be on the set tomorrow.
WHITFIELD: Oh, yes, yes, yes.
CALLEBS: So, all those Fredricka fans...
WHITFIELD: If I could just get 24 hours in of New Orleans for a little (INAUDIBLE), that's what I had to do. But I'll be back in Atlanta anchoring the shows. And you're going to be joining us from here tomorrow. So, Kyra, you got to tune in to that, too.
PHILLIPS: I love it.
WHITFIELD: (INAUDIBLE) some crawfish. A little crawfish (INAUDIBLE).
PHILLIPS: OK, yes, you make sure she brings us...
WHITFIELD: I'll get in two servings for you and me.
PHILLIPS: Thanks, (INAUDIBLE).
CALLEBS: I'm never going get the microphone back.
PHILLIPS: All right. have her give Dr. John a big kiss for me. Bring me back some etouffee, and you know, got to support local musicians there in New Orleans. That's the heart of that city.
Thanks, Sean.
CALLEBS: All right. Thank you, Kyra. See you.
PHILLIPS: All right. See you later.
Well, in tough times a lot of people are looking to work right now. We're trying to link up job seekers with potential employers in a segment we call the "30-Second Pitch."
Well, we caught up with Cynthia White at a job fair in Atlanta earlier this week. So, get the countdown clock ready. Here's Cynthia's pitch.
(BEGIN VIDEOTAPE)
CYNTHIA WHITE, JOB SEEKER: Hi. My name is Cynthia White. And I am looking for an administrative position with a company that is growing. I prefer legal, medical or accounting. My background is with dealing with people. I've always been able to help people in various aspects of their lives, even in the domestic violence situations. So, I do like working with people. And I'm willing to work with any company that is growing.
(END VIDEO CLIP)
PHILLIPS: All right. You saw the e-mail. You saw her name. "30-Second Pitch."
Meanwhile, president of the United States getting ready to step up to the mike. He's going to be talking about just the millions of college students across the country here getting a good hard lesson in economics as they get ready to go on to college. You know, we're talking about loans, grants, scholarships, loans in particular a tremendous burden on students and families, as most -- as we all know, all of us that went away to college. There are also huge casts -- or costs, rather, to taxpayers. I mean, we're talking billions of dollars here.
But President Obama says that he wants to change course, and now he's pushing forward with a new program to help support students like the college student right now, Stephanie Stevenson (ph), who's introducing the president.
Let's listen in.
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STEPHANIE STEVENSON (ph), COLLEGE STUDENT: ... and Maryland state government. I was lucky, but so many students are discouraged from obtaining their college education because they lack the financial, social and academic resources necessary to succeed in an expensive and fast-paced collegiate environment. Americans have always used education to break through the glass ceilings that have blocked the entry into mainstream society. And I am so honored that I am here today, and I am honored to introduce to you the president of the United States, who I know who will help to improve education for all American children, President Barack Obama.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you.
STEVENSON: Thank you.
OBAMA: That was excellent. We might have to run her for something someday. That was terrific.
Thank you, Stephanie (ph).
I want to also introduce Yvonne (ph) Thomas (ph), who's Stephanie's (ph) proud mother. And we appreciate everything that you've done. And Stephanie's (ph) father, Albert, is around here as well.
You know, there are few things as fundamental to the American dream or as essential for America's success as a good education. This has never been more true than it is today.
At a time when our children are competing with kids in China and India, the best job qualification you can have is a college degree or advanced training. If you do have that kind of education, then you're well prepared for the future because half of the fastest-growing jobs in America require a bachelor's degree or more.
And if you don't have a college degree, you're more than twice as likely to be unemployed as somebody who does. So the stakes could not be higher for young people like Stephanie (ph).
And yet, in a paradox of American life, at the very moment it's never been more important to have a quality higher education, the cost of that kind of education has never been higher. Over the past few decades, the cost of tuition at private colleges has more than doubled while costs at public institutions have nearly tripled.
Compounding the problem, tuition has grown then times faster than a typical family's income, putting new pressure on families that are already strained and pricing far too much students out of college all together. Yet we have a student loan system where we're giving lenders billions of dollars in wasteful subsidies that could be used to make college more affordable for all Americans.
This trend, a trend where a quality higher education slips out of reach for ordinary Americans threatens the dream of opportunity that America has promised to all of its citizens. It threatens to widen the gap between the haves and the have-nots. And it threatens to undercut America's competitiveness because America cannot lead in the 21st century also we have the best educated, most competitive work force in the world.
That's the kind of work force and the kind of citizenry to which we should be committed. And that's why we have taken an proposed a number of sweeping steps over our first few months in office, steps that amount to the most significant efforts to open the doors of college to middle-class Americans since the GI Bill.
Millions of working families are now eligible for a $2,500 annual tax credit tax help them pay the cost of tuition, a tax credit tax cover the full cost of tuition at most of the two-year community colleges that are some of the great and undervalued assets of our education system.
We're also bringing much-needed reform to the Pell Grants that roughly 30 percent of students rely on to put themselves through college. Today's Pell Grants cover less than half as much tuition at a four-year public institution as they did a few decades ago. That's why we are adding $500 to the grants for this academic year and raising the maximum Pell Grant to $5,550 next year, easing the financial burden on students and families.
And we are also changing the way the value of a Pell Grant is determined. Today, that value is set by Congress on an annual basis, making it vulnerable to Washington politics. What we are doing is pegging Pell Grants to a fixed rate above inflation so that these grants don't cover less and less as family's costs go up and up.
And this will help prevent a projected shortfall in Pell Grant funding in a few years that could rob many of our poor students of their dream of attending college. It will help ensure that Pell Grants are a source of funding that students can count on each and every year.
Now, while our nation has a responsibility to make college more affordable, colleges and universities have a responsibility to control spiraling costs, and that will require hard choices about where to save and where to spend.
So I challenge state college and university leaders to put affordability front and center as they chart a path forward. I challenge them to follow the example of the University of Maryland, where they're streamlining administrative costs, cutting energy costs, using faculty more effectively, making it possible for them to freeze tuition for students and for families.
At the same time, we're also working to modernize and expand the Perkins Loan program by changing a system where colleges are rewarded for raising tuition and instead rewarding them for making college more affordable.
Now, just as we've opened the doors of college to every American, we also have to ensure that more students can walk through them. That's why I've challenged every American to commit to at least one year of higher education or advanced training, because, by the end of the next decade, I want to see America have the highest proportion of college graduates in the world.
We used to have that; we no longer do. We are going to get that lead back.
And to help us achieve that goal, we are investing $2.5 billion to identify and support innovative initiatives that have a record of success in boosting enrollment and graduation rates, initiatives like the I-BEST program in Washington state that combines basic and career skills classes to ensure that students not only complete college, but are competitive in the workforce from the moment they graduate.
And to help cover the cost of all this, we're going to eliminate waste, reduce inefficiency, and cut what we don't need to pay for what we do, and that includes reforming our student loan system so that it better serves the people it's supposed to serve: our students.
Right now, there are too many kinds of federal loans. First, there are direct loans. These are loans where tax dollars go directly to help students pay for tuition, not to pad the profits of private lenders. The other kinds of loans are Federal Family Education Loans. These loans, known as FFEL loans, make up the majority of all college loans. Under the FFEL program, lenders get a big government subsidy with every loan they make, and these loans are then guaranteed with taxpayer money, which means that if a student defaults a lender can get back almost all of its money from our government.
There's only one real difference between direct loans and private FFEL loans. It's that, under the FFEL program, taxpayers are paying banks a premium to act as middlemen, a premium that costs the American people billions of dollars each year.
Well, that's a premium we cannot afford, not when we could be reinvesting that same money in our students, in our economy, and in our country.
And that's why I've called for ending the FFEL program and shifting entirely over to direct loans. It's a step that even a conservative estimate predicts will save tens of billions of tax dollars over the next 10 years.
According to the Congressional Budget Office, the money we could save by cutting out the middleman would pay for 95 percent of our plan to guarantee growing Pell Grants. This would help ensure that every American, everywhere in this country, can out-compete any worker anywhere in the world.
In the end, this is not about growing the size of government or relying on the free market, because it's not a free market when we have a student loan system that's rigged to reward private lenders without any risk.
It's about whether we want to give tens of billions of tax dollars to special interests or whether we want to make college more affordable for 8.5 million more students. I think most of us would agree on what the right answer is.
Now, some of you have probably seen how this proposal was greeted by the special interests. The banks and lenders, who have reaped a windfall from these subsidizes, have mobilized an army of lobbyists to try to keep things the way they are. They are gearing up for battle. So am I.
They will fight for their special interests. I will fight for Stephanie (ph) and other American students and their families. And for those who care about America's future, this is a battle we can't afford to lose.
So I am looking forward to having this debate in the days and weeks ahead. And I am confident that, if all of us here in Washington do what's in the best interests of the people we represent and reinvest not only in opening the doors of college, but making sure students can walk through them, then we will help deliver the change that the American people sent us here to make.
We will help Americans fulfill their promise as individuals, and we will help America fulfill its promise as a nation.
So thank you very much.
And thank you, Stephanie (ph). And thank you, Stephanie's (ph) mom.
All right. Thanks, guys.
PHILLIPS: You heard it right there. The president of the United States talking about all the students buried in debt and struggling to dig out. You know, going to college these days could cost you for the rest of your life, an almost inevitable fate for more and more college students.
And now it's time to put a face on that story, the face of Candace Lowe. She's a college student, single mom also, right here in Atlanta, Georgia. She's up to her neck in debt, owing more than $15,000 in student loans.
And as I was just reading that introduction you were going -- I mean, could you relate? And did the president say anything here that made you feel better?
CANDACE LOWE, COLLEGE STUDENT: Yes, he did. He - you know, it's so hard to even get into college as it is. So, you know, with us - helping us with the loans and things like that can really help us to be motivated to say OK, I really want to do this. And so, you know, just seeing him say that, I'm like OK, yes, we can see that we have a way, yes, to get to college now.
PHILLIPS: Tell us your story. You wanted to go to school. How did you -- and you couldn't afford, obviously, to pay out of your pocket. Tell me what you applied for and how you got into trouble. How you got into such debt.
LOWE: From high school, you know, they advise us to do the FASPA (ph) and I did that. I got several offers from loans. I first went with Direct Loan, which they actually have been doing very well with me. I then went with Sallie Mae. I've been having a few problems with them. Just really trying to pay it back. That was the biggest thing, trying to pay back the loan.
PHILLIPS: So repaying your loan.
LOWE: Yes. That's the biggest thing, repaying the loan and the interest rates. They add up and add up. And if you ask for forbearance or deferment, the interest rates are going to keep on, keep on adding up.
So, by the time you get to going to repay it, you know, you're way over the limit that you had in the beginning.
PHILLIPS: So is it the $15,000 you owe, you owe that to Sallie Mae?
LOWE: I owe $12,400 to Sallie Mae. PHILLIPS: Now what did you do when you tried to call them up and get help or advice or talk about repaying? I mean were they helpful?
LOWE: Not really. I've been hung up on. I was told that I could do a forbearance. In the end found out that they said I can't do a forbearance, it's too late to do a forbearance, and they said I have to pay $50.00 to do the forbearance. So I've just been getting a lot of run around. I haven't been able to talk to anyone to help me out in the situation and let them know I don't have a job, I'm a single mom. I'm really trying to repay it and then they told me, the end of this month, that I have to pay $209.
PHILLIPS: OK, even more?
LOWE: Yes.
PHILLIPS: All right. Now I'm being told my producer Sonia Houston (ph) found out it was Sallie Mae you were having a hard time with. So, she called them up to explain the situation, kind of got the run around. And then all of a sudden got another call back and did you just have a conversation with somebody on Sallie Mae?
LOWE: Yes, I did, actually.
PHILLIPS: What happened?
LOWE: They called back and said hey, we're just going to try to make some payment arrangements with you. We know you've been having a few problems and things like that. And I said, wow, all of a sudden before I actually, you know, be able to pay it back, now I get a response.
PHILLIPS: I'm glad we were able to help you out. But see, this really tells a much bigger story in that we can't make a call for everybody like you that's having a hard time and trying to get these loans paid back.
So, OK, well good. We're going to have to follow up and find out what happens now that you have hopefully like a cell phone or direct number to the head of Sallie Mae there.
LOWE: I do now.
PHILLIPS: There we go. OK, good. There's something good that's coming out of this.
So tell me what you're most concerned about right now. I mean, just day to day. Here you are a single mom, trying to go to school. I mean how are you paying the bills and how are you dealing with this debt? Or just are you continuing to get in deeper debt?
LOWE: I'm continuing to get in deeper debt. As far as, you know, the economy right now, it's hard trying to find a stable job that you can actually work full time. Right now, I have a small -- I just actually got a small part-time job and I only work six hours a week. PHILLIPS: All right. Where are you going to school?
LOWE: University of Phoenix.
PHILLIPS: OK, University of Phoenix. What do you want to do?
LOWE: Health care administration.
PHILLIPS: OK, so what would be your ideal job?
LOWE: I want to be a director of a hospital. I'm not particular -- I want to do Florida, so I'm thinking, you know, being a director of a hospital and I want to help everyone, you know, be able to get them in. And, you know, like Obama was saying about the tuition and things like that. I want to be able to get people in so they don't have to do tuition. Just a program that people can come in and learn how to do the CNA positions, nursing positions, you know, do what I do, director. I want to be able to help people.
PHILLIPS: So when are you going to graduate?
LOWE: February of 2010.
PHILLIPS: All right, 2010.
So this is what we're going to do -- hopefully, we're going to be in a better economic situation at this time. I want you to let us know what happens with Sallie Mae, all right?
LOWE: OK.
PHILLIPS: And if you're able to get your head above water. That's number one.
Then, number two, come graduation, that means you've got to stay in touch with us for more than a year, OK?
LOWE: Yes, I will.
PHILLIPS: And let us know when you're ready for a job. If we're still doing the 30-second pitch, you've got to come back and give your 30-second shout-out to employers. OK?
LOWE: OK.
PHILLIPS: All right, good.
LOWE: I will do that.
PHILLIPS: I think you're going to be just fine. That's my gut.
All right.
LOWE: Thank you.
PHILLIPS: Candace, thanks for coming on and sharing your story. I appreciate it.
LOWE: Thank you.
PHILLIPS: I'm glad Sonia could help you.
LOWE: Thank you. I really do appreciate it.
PHILLIPS: All right. Well, we appreciate you.
Candace Lowe, appreciate it.
LOWE: Thank you.
