Education is the key to so much we want to achieve as a country: a stronger, more equitable economy; a healthier, more vibrant democracy; a future in which we meet challenges with ingenuity and skill. Education is also the key to our young people achieving their dreams. It’s how we develop our talents and imagine different futures for ourselves. So any serious plan for America’s future must include a bold plan to put quality education – including college – within everyone’s reach, no matter how much money they have.
College used to be pretty affordable. For millions of Americans, that’s not the case anymore. Too many families in the United States are struggling with student debt, and the problem has reached crisis levels. Within the last ten years, total student debt in our economy has more than doubled and now exceeds $1.2 trillion. Nearly 7 out of every 10 new graduates of four-year colleges are in debt, and these indebted graduates carry an average balance of nearly $30,000. Student debt has surpassed credit card debt, car loan debt, and home equity lines of credit to be the second largest source of consumer debt.
And this is not just an issue for borrowers: It is holding our economy back. This debt prevents people from forming families, buying homes, and starting small businesses. It sends the wrong signal to future students whom we need to complete college to drive economic growth.
Meanwhile, for families sending their kids to colleges and universities, tuition has ballooned out of control and has become increasingly unaffordable even at public colleges and universities. Tuition has risen 40% in the last ten years at four-year public colleges and universities, after inflation, while family incomes have remained basically flat. And states have been cutting their spending on higher education – by roughly 20% per student since the recession – rather than expanding their investments.
Simply put, this situation has careened out of control. Hillary Clinton has a plan to help millions of Americans with their debt right now, and a plan to make college debt-free for future generations.
Provide Immediate Help to Graduates Who Need Relief from Crushing Debt Hillary has made clear she will fight to ensure that all borrowers can:
- Refinance their student loans at current rates, just as borrowers can refinance a car or home loan. Refinancing would help 25 million borrowers across the country, with the typical borrower saving $2,000 over the life of the loan.
- Enroll in income-based repayment. Nobody should have to pay more than 10 percent of monthly income, and college debt should be forgiven after 20 years – and 10 years if a borrower works in the public interest. Hillary will simplify, expand and develop options for automatic enrollment in these programs.
- Push employers to contribute to student debt relief. Employers must be part of the solution to the student debt crisis. Clinton will create a payroll deduction portal for employers and employees that will simplify the repayment process. She will explore further options to encourage employers to help pay down student debt.
- Get relief from debt for starting a business or social enterprise. Aspiring entrepreneurs will be able to defer their loans with no payments or interest for up to three years so that student debt and the lack of family wealth is not a barrier to innovation in our country. For social entrepreneurs and those starting new enterprises in distressed communities, her plan will provide up to $17,500 in loan forgiveness.
- Reward public service. AmeriCorps members who complete two years of national service and a year of public service can have their loans forgiven. Teachers who teach in high-need areas or in subjects with teacher shortages – such as computer science or special education – will get enhanced loan forgiveness.A Moratorium on Student Debt to Get Millions of Borrowers Relief from Crushing Debt: Today, Hillary Clinton is announcing that she will take immediate executive action to offer a three-month moratorium on student loan payments to all federal loan borrowers. During this time-out from paying student loans, every borrower will be given the resources and targeted help they need to save money on their loans. With dedicated assistance from the Department of Education during this moratorium, borrowers will be able to consolidate their loans, sign up quickly and easily for income-based repayment plans, and take direct advantage of opportunities to reduce monthly interest payments and fees. Borrowers who are delinquent or in default will receive additional rehabilitation options to help them get back on their feet. Clinton will also use the moratorium to crack down on for-profit colleges and loan servicers who have too often taken advantage of borrowers – and to ensure that borrowers can resolve outstanding issues in a timely and fair manner.
Debt-Free College for our Future Students
Hillary Clinton has pledged to achieve the goal of debt-free college for future graduates, so that cost is never a barrier for young people seeking to pursue their dreams of higher education. It’s a simple, but bold idea: Every student should be able to graduate from a public college or university in their state without taking on any student debt. To reach this goal, Hillary is enhancing the New College Compact she announced last year. Her plan will:
- Eliminate college tuition for working families. Families with income up to $125,000 will pay no tuition at in-state public colleges and universities – covering more than 80 percent of all families. From the start of this plan, every student from a family making $85,000 a year or less will be able to go to a 4-year public college or university tuition free. This income threshold will increase by $10,000 a year every year over the next four years so that by 2021, all students with a family income of $125,000 will have the opportunity to pay no tuition. She will also continue her commitment to ensure that community colleges are tuition-free for all working families.
- Help students deal with all of the costs of attending college. Hillary Clinton will protect Pell Grant funding to help low- and middle-income students pay non-tuition expenses, and she will restore year-round Pell Grant funding so that students have the necessary support they need to take summer classes and meet their goal of completing college. She will make a major investment in HBCUs, Minority-Serving Institutions and other low-cost, modest-endowment private schools so that these deserving students also benefit from the lower cost of college. She will work to expand opportunities for students to earn money for expenses through term-time work and to receive college credit for national service. She will expand support for student-parents, including a fifteen-fold increase in federal funding for on-campus child care.
The New College Compact: Hillary Clinton’s plan requires everyone to do their part. The federal government will make a major new investment to make this possible, but states will have to step up and meet their obligations as well.
States will have to commit to a combination of reinvestment and reform over the next four years and beyond to ensure that federal support is funding students and not excessive cost growth.
- Colleges and universities will be accountable for reining in costs to provide value to their students; improving completion rates and learning outcomes; and doing more to provide students from disadvantaged backgrounds with the tools they need to reach college and succeed once they get there.
- Students will be expected to work 10 hours a week to help defray the full cost of attendance. Clinton will push to expand work opportunities that build career skills and introduce students of all backgrounds to public service careers.
- As part of this New College Compact, Hillary will encourage and reward innovators who design imaginative new ways of providing valuable higher education to students while driving down costs. And she will crack down on the abusive practices of for-profit colleges that defraud taxpayers while burdening students with debt for educational programs of no value.