Former Senator and Secretary of State Hillary Clinton has rolled out a $350 billion plan for the purpose of making college affordable and assisting millions of Americans living with student loan debt as part of her bid for the Democratic nomination in the 2016 Presidential election.
Clinton explained the idea at a town hall-type meeting with New Hampshire voters. New Hampshire has one of the highest average levels of student debt in the country at $33,000 per student, according to Danielle Douglas-Gabriel and Anne Gearan of The Washington Post.
“College is supposed to help people achieve their dreams, but more and more paying for college actually pushes those dreams further and further out of reach,” Clinton said in front of a crowd of about 600 at a public high school in Exeter, NH. “That is a betrayal of everything college is supposed to represent.”
A student at the University of New Hampshire, Dan Torrey, told Clinton at the meeting that he is working at three jobs this summer to help pay his tuition.
Democratic leaders have pushed Clinton to support “debt free” college, just as her challengers Sen. Bernie Sanders (I-Vt.) and Gov. Martin O’Malley of Maryland (D) have already done. Clinton has not endorsed the idea, but has written an agenda that covers a major portion of the Democratic list of priorities.
The plan, “New College Compact”, would do away with tuition at four-year public colleges through federal investment. Clinton proposes to pay for the plan by closing tax loopholes, such as initiating cuts on itemized tax deductions for high-income families. Over half of the $350 billion would go toward increasing state investment in higher education, one-third would be used to cover the cost of lowering interest rates on student loans, and the rest would cover the other initiatives.
Some policy experts are worried that such a narrow focus leaves out important issues such as completion of four years of school and the quality of the education received. Clinton’s plan does include several ideas for improving the country’s 60% college graduation rate. She would supply grants to schools that make an investment in child care, emergency financial aid, and other interventions that would support students’ completion.
There are bipartisan ideas in the compact including simplification of the application for financial aid and consolidating student loan repayment plans. Clinton supports a liberal and conservative proposal to have colleges pay some of the debt that occurs when students default on their school loans, write Annie Karni and Allie Grasgreen of Politico.
Clinton’s plan has been compared to President Obama’s Race to the Top initiative, a $5 billion Education Department grant released in 2009 for US public schools to create incentives to improve education. The compact includes easing the financial burden for students who attend historically black colleges, a bill of rights for student loan carriers, and risk-sharing for colleges. A penalty would be imposed on schools when students default or are unable to pay their loans.
If Clinton wins the election, report Jennifer Epstein and Janet Lorin of Bloomberg, the higher education proposals will be a top priority in her administration’s first year, according to a Clinton campaign official who was not speaking on the record.
Congressional approval would be required for most of the ideas and for Clinton’s manner of funding them. Almost seven in 10 college graduates have taken out loans in order to attend school. The total student debt owed in the US is over $1.3 trillion.
Another set of proposals by Clinton is focused on those who already have student loan debt to pay. Clinton is borrowing the ideas of the Obama administration by asking Congress to find a way for those with student debt to refinance their loans at the current federal rate.
“So many borrowers have been cheated by the student loan industry, just like we saw in the subprime mortgage market,” said Rohit Chopra, the Consumer Financial Protection Bureau’s former student loan watchdog , who left the CFPB earlier this summer. “There needs to be beefed up consumer protections to cut down on the conflicts of interest.”