States that guarantee “no-loan” tuition at four-year public schools and free tuition at community colleges would be eligible to receive federal funds.
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The Democratic front-runner’s pitch will likely satisfy many education advocates on the left, and allow Clinton to offer a detailed plan to the many voters voicing concerns about student debt and college affordability on the campaign trail.
Clinton’s plan would expand consumer protections, including creating a new Borrower Bill of Rights to inform people who take out student loans of their options; banning loan servicers and bill collectors that consistently break the law; and helping students who have been defrauded-like those who attended the Education Department-shuttered Corinthian Colleges-discharge their debt.
Marco Rubio of Florida proposed a system in early July in which private investors could pay a student’s tuition in return for a cut of the graduate’s future earnings, The Christian Science Monitor previously reported, a concept known as “student investment plans”, “human capital contracts”, or “income share agreements”.
Vermont Sen. Bernie Sanders and former Maryland Gov. Martin O’Malley, Clinton’s Democratic rivals, have already laid out ideas for curbing college costs and debt.
The Progressive Change Campaign Caucus has pushed hard for each 2016 Democrat to back a “debt-free college” plan and has pledged to hold there candidates to their plans.
Clinton also proposes reducing the interest rate that the federal government charges for Stafford loans, to a point where the program would break even, rather than generate a profit to the Treasury. States that agree, under the Clinton plan, will win grants from the federal government. The $70 billion annual proposal would be funded by imposing a tax on transactions by hedge funds, investment houses and other Wall Street firms.
Clinton will roll out her plan during a two-day swing through New Hampshire.
National student debt is near $1.3 trillion dollars and the average price for in-state students at public four-year universities is 42 percent higher than it was a decade ago, according to the College Board. Clinton heard from New Hampshire residents about heroin and opiate addiction during a stop in Keene earlier this year.
According to the Clinton campaign, the plan will cost $350 billion over 10 years but will be “fully paid for by limiting certain tax expenditures for high-income taxpayers”. Elizabeth Warren (D-Mass.) popularized the notion of student loan refinancing, which has been blocked by Congressional Republicans.
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“There’s something wrong when students and their families have to go deeply into debt to be able to get the education and skills they need in order to make the best of their own lives”, she told students and teachers at Kirkland Community College in Monticello, Iowa, in April, shortly after announcing her campaign. Clinton’s proposal relies on states to administer the grant programs, which would require colleges and universities to meet specific targets for student affordability.
