[Christine Romans, Cnn Anchor:] Germany's chancellor warning it is now or never when it comes time to solving Europe's debt crisis. I'm Christine Romans. As we speak, talks of finally getting a handle on the region's debt problems are entering their final stretch. What it means for you and the global economy.
[Carol Costello, Cnn Anchor:] And "Occupy" chaos. I'm Carol Costello. Anti-Wall Street protesters tossing paint at riot police in Oakland who sprays the crowd with tear gas in return. Hundreds of demonstrators have now been arrested.
[Ali Velshi, Cnn Anchor:] And I'm Ali Velshi. President Obama about to unveil a plan to help students with the crushing cost of higher education. We'll break down the president's proposal on this AMERICAN MORNING.
[Romans:] All right. Everybody, good morning. It is Wednesday, October 26th. Welcome back to
[American Morning. Costello:] Yes, good morning to you. Up first this morning: what's happening in Europe right now will no doubt weigh heavily on the U.S. markets and your investments. European leaders are trying to hammer out a plan to fix the region's debt problems. As we wait for word of the deal from Brussels, U.S. stock futures are trading higher.
[Velshi:] Let's go straight to Nina dos Santos. She's live in Brussels, Belgium. Nina, this is the fourth meeting, I think, in the course of a few days a combination of either European leaders or finance ministers or Eurozone leaders. What's the hold up? And is there a chance of breakthrough and some progress today?
[Nina Dos Santos, Cnn International Correspondent:] Yes, we're limping ever closer towards the finish line. They've got a few hurdles to clear before the negotiations finish this evening. And the big question is: they've promised us many times that we'll have a deal to solve the Eurozone's debt crisis. By the end of today, question is, will we and what happens if we don't? The question is, really, if we don't, we could be in unchartered territory. Let's have a look at the issues that are at hand here, Ali. It's obviously complicated. I'll be brief. On the one hand, they've got to boost the Eurozone bailout fund to refinance the Greek problem. They've also got to impose a hair cuts or write-down on private investors to make the private sector bear some of the pain of bailing Greece out and shore up the capital of the Euro zone banks. Difficult subjects to discuss. Difficult subjects to report on, but imagine if you are 17 countries having to decide on this altogether, Ali.
[Velshi:] Nina, there's some sense of consequence if there isn't a deal or is there overwhelming expectation that there will be a deal?
[Dos Santos:] Well, I've heard the word catastrophe mentioned to me several times over the last couple days. That may be a little bit farfetched because what we've already seen is the be all and end all summit slipped already. That was supposed to be three days ago in Brussels on Sunday. I've been in the Belgium capital myself since then waiting for a decision. They promised us we will have something in place by today. But, realistically, what we're starting to hear already is that the details of whatever they may or may not agree on when they do eventually come to some kind of conclusion after today's talks may be sketchy at best and that might not be enough for the markets. Of course, I should remind you that what is at stake here is the single currency, the stability of the euro and accounts for 25 percent of the world's trade, big reserve currency. And so, it could affect all sorts of things from the dollars, to trade with the United States. Now, just for a little bit of fun, I wanted to show you three of these. They are Belgium waffles. This town as this summit continues is continuing to be increasingly synonymous with more waffle. The big test is, will we see any later today?
[Velshi:] We have a truck outside Columbus Circle. Have you guys seen it?
[Costello:] The waffle truck?
[Velshi:] You can see it on this camera behind us. But there's actually a truck that sells those. It's a Belgium waffle cart. And they sell hot ones and they call them dinghies or dinghies or something and they put sauces on them. You know, it's delicious.
[Costello:] Where are we going with this?
[Velshi:] We're not going anywhere.
[Romans:] Nina dos Santos, thank you.
[Velshi:] Nina, excellent work. Thank you so much. Great explanation.
[Romans:] And the question is, when they do get a deal, what does the deal look like?
[Velshi:] Right.
[Costello:] Hopefully not a waffle.
[Romans:] You're right. Lots of little nooks and crannies.
[Velshi:] Right. U.S. markets are indicating a higher open. This is one of the things that they're thinking about. So, I think there's a bit of a feeling of optimism that could deteriorate.
[Romans:] And does it matter? It's 25 percent of the world's trade yes, it matters.
[Velshi:] Yes, it matters.
[Costello:] In other news this morning, "Occupy Wall Street" protesters taking it to the streets in Oakland, California, and getting tear gas in return. The protesters defying a ban and returning overnight to their camp at city hall plaza. Police sprayed the crowd with tear gas after getting hit with paint and other objects. CNN's Dan Simon is live in Oakland with more on this. How many arrests went down, Dan?
[Dan Simon, Cnn Correspondent:] About 100 people arrested, Carol. Things getting ugly when police decided to throw the protesters out where they're hanging out near city hall. They've been there for about 15 days and police decided that the situation was getting unsafe. They thought there was some health problems that could develop with everyone being there in sort of this tent city. So, yesterday afternoon, they made the decision to hit the road and so, they disbanded. And then, several hours later, these protesters, about 500 of them, decided they wanted to come back. And that's where they were met with police who were in riot gear, tear gas was dispelled. It was a very ugly situation. As I said, about 100 people arrested. There were some minor injuries. Behind me I'm going to step out of frame you can see a live picture now. You can see that there are some barricades set up. A minimum, a minimal police presence, a few protesters in front of these signs. It seems like things right now are under control. But, of course, police still here just making sure that the violence, if you will, doesn't erupt, again Carol.
[Costello:] Yes. We'll have to wait and see what happens later today. Dan Simon live in Oakland, California thank you.
[Velshi:] Protesters also clashing with police in Atlanta. Fifty or so demonstrators were arrested there. They refused the mayor's order to leave Woodruff Park in downtown Atlanta. The park had been home to the "Occupy Atlanta" movement for several weeks. Take a look at those pictures.
[Romans:] All right. Meantime here in New York City, the occupation of Zuccotti Park continues. You're looking at live pictures now. And protesters are listening to complaints from local residents about the noise. They've agreed to limit drumming to just four hours a day. So, demonstrators will drum between 12:00 noon and 2:00 p.m., and then from 4:00 to 6:00 p.m.
[Velshi:] I didn't realize the drumming was such a constant feature. You know?
[Costello:] Oh, yes. Oh, yes, I went down there last week and they constantly drum. That would drive you insane after a while.
[Romans:] If you lived down there.
[Costello:] Oh, if you lived down there, could you imagine? But to the tourists coming down and looking at them, they're enjoying it.
[Velshi:] Sure. In Times Square, they give you money if you drum or dance or something like that.
[Costello:] I'm glad they have come to some sort of compromise down there. An education lasts a lifetime, and in some cases so do the bills. That's why today, President Obama will again bypass Congress and announce new executive actions to help ease the burden of student loans. Joining me now to talk about the plan, Education Secretary Arne Duncan. Welcome.
[Arne Duncan, Secretary Of Education:] Good morning. Thanks so much for having me.
[Costello:] Oh, thanks for being here. We appreciate it. The average student debt for people graduating from a four-year college is nearly $24,000. It is so bad that our combined student debt now eclipses all of our credit card debt. It's just astounding to me. So, how will these changes that the president is proposing help?
[Duncan:] This is a big deal. Basically, what we're doing we're just going to do this by ourselves. We can't wait for Congress. We're just going to act is we're going to reduce those monthly payments, depending on the individual, by as much as a couple of hundred dollars. So, if we can reduce those monthly payments, we'll reduce defaults, will strengthen the economy. And, Carol, you know, people are hurting out there. Families are struggling. It's hard for recent college graduates to get a good job. We have to help out. We're thrilled to be able to do this and just to do it now, and not to wait.
[Costello:] Well, let's look at an example you gave us on how this plan will affect a "real person" I'll put that in quotes. We have a nurse earning $45,000 a year with $60,000 in federal student loans. Under the standard payment plan, she'd paid $690 a month. Under the revised pay-as-you-earn plan, that would drop that would drop to $239. That would save that woman, that nurse, $451 a month. And after 20 years, if she hasn't paid off all of the debt, that debt will be forgiven. So, I guess, my question is why would you ever choose to pay off all of the debt, if the debt will eventually be forgiven?
[Duncan:] Well, people want to do the right thing. We want to encourage them to do this. That is really about reducing that debt putting more disposable income in people's pockets, helping them pay the rent or buy the car or buy groceries or pay the electric bill, whatever it might be. This is trying to help people now. It ultimately by reducing that debt each month, lowering those payments, we're going to reduce default rates for the country.
[Costello:] Of course, the biggest problem here is the cost for the college education. It just keeps going up. It increased, what, Christine is my encyclopedia of consumer knowledge, what, college
[Romans:] Another 5 percent to 8 percent defending on where you go.
[Costello:] Another 5 percent to 8 percent. That's crazy. Is there anything anything the government can do to try to control the cost of a college education?
[Duncan:] Well, I don't know if we can control the cost. We tried to do a couple things. We've already had historic increases in Pell grants on the front end, an additional $40 billion for low-income families to send their children to college. We did that without going back to taxpayers for a dime, simply stopping subsidizing banks, putting all that money into young people. That was controversial here in Washington. We thought it was absolutely the right thing to do. We're also announcing today much greater transparency. As young people are applying to college, they're going to get much more information on what they'll pay over the four years. We have the best system of higher education in the world. People are smart, they're savvy. We want them to shop and compare, and everyone wants a good education and they want a good value for that money.
[Costello:] Give them some give them some advice because, you know, it's public universities because states are having so many problems with their budgets. Tuition at state university is going up, too. I mean, nobody can afford anything any more. It's insane. So, give us some advice. What should we do? What should parents do to ensure that their kid can get a college education?
[Duncan:] Again, shop and compare. There are different things going on. Some universities are raising their tuition much higher than inflation. Other universities are keeping their tuition flat. They're going to three-year programs. They're going to no-frill universities. Community colleges are great, great value. Great bargain. We're doing everything we can to support those. So, there's a range of great options. Be smart, think about it. Weigh all those options. You want to get a good education. You want to look at graduation rates. You want to look at potential majors and you want to look at what those costs are going to be, not just the first year, but over the four years until you complete.
[Costello:] So, going back to community college, I think many parent out there would say, I just don't think having a degree from a community college would get my kid a good job.
[Duncan:] I would beg to differ. The community colleges are this unpolished, unrecognized gem along the education continuum. There are many people who actually have four-year degrees going back to community colleges to get the next good job green energy, health care, technology, whatever it might be, whether it's going directly into the workforce or going on to get a bachelor's degree once you complete the community colleges degree. We think those community colleges a great, great option. And with our Pell grants, you can basically go there with almost no out- of-pocket expenses. Go there at zero additional costs.
[Costello:] Well, on the subject of Pell grants, there are some Republicans who don't much like the idea of Pell grants. And I know that universities across the nation have been sending out these letters saying, "Help us protect the Pell grant because they're in real danger of going away."
[Duncan:] To me that's anyone who would take away from Pell grants, I just fundamentally reject that. It makes no sense to me. We have to educate our way to a better economy. The American Dream has always been not just to graduate from high school, but some form of higher education. That's the only way we're going to strengthen our nation long haul. We need many more young people going on to college. Just in the past two years, we had a 50 percent increase in the number of people benefitting from Pell grants. We have to fight to maintain those. Anyone who wants to reduce Pell grants is not just hurting young people, but hurting our country.
[Costello:] Arne Duncan, thank you so much for joining us this morning. We appreciate it.
[Duncan:] And thanks for the opportunity.
[Romans:] And that second question you asked him was so good. I mean, if you're going to stretch it out and have someone forgiven in any way I mean, when I graduated from school, the first thing I did for two years is every cent went to pay a student loan I had from my senior year. I couldn't rest knowing it was there. Was that the right thing to do? Should I have stretched it out for a long time and use that to invest in something else? I don't know.
[Velshi:] We have this argument a lot.
[Romans:] I know. And you were actually right on that one. But another thing is a lot of families ask me so, wait a minute, we haven't upgraded our house. We're only driving two used cars. We're trying to save every penny and the student loan office is going to see all the money that we've saved and we're going to pay 100 percent of the tuition.
[Velshi:] Right. That's a big issue. If you're a saver and you're responsible and this has been the issue for years here, right? That savers and people who've done the right thing are not getting these special services and provisions.
[Romans:] I mean, they're not going to get there's no student loan debt for them to have.
[Velshi:] But sadly, it is not paying to be a saver in America right now.
[Romans:] No, it doesn't. You're right.
[Costello:] No.
[Romans:] You're right.
[Costello:] That's the saddest thing in all.
[Velshi:] Well, still ahead why a former Goldman Sachs director is expected to surrender to the FBI this morning.
[Romans:] Plus, Hurricane Rina aims for Cancun. Rob Marciano has been tracking this big storm from the CNN hurricane headquarters. It's 14 minutes after the hour.