07/07/2016

Hillary's plan for college affordability

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Hillary Clinton has proposed to make college free for millions of students, underscoring her commitment to affordable higher education. The plan—which waives tuition for all families earning less than $125,000—is part of a new iteration of her New College Compact, and is the result of sustained conversation about accessibility.

"With the New College Compact, Hillary has incorporated the best policy ideas she's heard from millennials on the trail, as well as ideas from leaders like Sens. Elizabeth Warren and Bernie Sanders, to further strengthen her bold and progressive college affordability plan," says AFT President Randi Weingarten. With her position as the presumptive Democratic presidential nominee, the collective dream of free college is now within reach.

The proposal would be implemented gradually, reaching families below the $85,000 threshold first, and reaching families who earn up to $125,000 within five years.

Clinton continues to emphasize her initial attack on the high cost of higher education: debt-free college. "American families are drowning in debt caused by ever-rising college costs, and it is imperative that the next president put forward a bold plan to make debt-free college available to all," she said in a statement. She is also committed to addressing the existing debt.

To that end, she has proposed a three-month moratorium on all student loan payments to give borrowers time to refinance if they need to. Public service loan forgiveness and income-based repayment plans are available to many borrowers, but they are not always utilized; if a moratorium were imposed, the publicity around it could draw enough attention and give people enough time to get on board. Clinton's plan estimates that refinancing would help 25 million borrowers, with the typical borrower saving $2,000 over the life of the loan.

Here are some of the details of her New College Compact:

For future students:

  • Make college debt-free.
  • Eliminate tuition at in-state public colleges and universities for families with income under $125,000, by 2021.
  • Restore year-round Pell Grant funding—a priority that will be particularly useful for community colleges, where enrollment has dipped when Pells were no longer available over the summer.
  • Invest in historically black colleges and universities (HBCUs), minority-serving institutions, and low-cost, modest-endowment private schools.
  • Expand support for students who are parents, and help fund on-campus childcare.

For those with existing student debt:

  • Establish a three-month moratorium on student debt, and target borrowers with information about how to save money on their loans during that time.
  • Forgive college debt after 20 years of payments for undergraduate debt, and 25 years for graduate school debt.
  • Forgive college debt after 10 years of payments for borrowers who work in public service.
  • Promote income-based repayment, which limits payments to no more than 10 percent of a person's monthly income.
  • Simplify debt repayment plans.
  • Support entrepreneurs by deferring loans for those who start a business or social enterprise, and offer up to $17,500 in loan forgiveness.

The plan also requires that states step up to fund public higher education, and that colleges rein in costs. And it cracks down on for-profit colleges that exploit students and drain education funding at the federal level.

"Clinton's New College Compact eliminates financial obstacles for future students, helps those already dealing with debt get their feet under them by allowing them to refinance their loans, and ensures that states invest in higher education," says Weingarten. "This plan shows Hillary's commitment to working together to break down barriers and level the playing field so all students have a fair shot at getting a higher education."

For more details, see the Clinton's official summary.

[Virginia Myers]