In the 2016 presidential election, a growing problem is beginning to wiggle
its way into the debate: the
student loan epidemic. For a number of years, many jobs that did not require higher education
were exported overseas, and as such, the need for college education has
dramatically increased. As the necessity of higher education has grown
we have seen the costs of tuition skyrocket. It is this change in the
education market that has forced most students to taking out loans. However
with tuition costs at all time highs, students are finding themselves
in a stranglehold of debts at the start of their careers. With this problem
growing yearly, many of the presidential candidates in the 2016 election
have put forth their possible solutions to the student loans crisis.
Hillary Clinton announced her plan to help ease the burden of Student loans
dubbed “The New College Compact”. Her plan calls for $350 Billion that will be allocated to the
states. As part of the plan, $170 Billion will be given to states who
agree to keep their state university budget at current rates. The intention
is that the money would go to students who plan to go to public colleges.
As part of the plan, students will be granted a portion of government
money (to be determined based on a financial aid calculator) to create
a plan determining how much a student would need annually, and require
each student to
work at least 10 hours weekly. Any money granted to a student is meant to go towards a 4 year public
university degree and necessary housing expenses.
Under the plan, the government budget for Pell grants will be raised as
well. The remaining money will be used to provide aided tuition for military
veterans and Americorp volunteers. The final proposed action of the New
College compact would allow students to refinance their loans at current
rates capping the percent of maximum payments at 10% of income. She also
has hopes to grant loan forgiveness of any outstanding student debts that
have yet to be paid within 20 years of graduation.
Senator Marco Rubio’s approach to the student debt crisis is very
different from his Republican and Democrat constituents. Unlike most elected
officials, Rubio entered office as one of the poorest senators ever. He
is so young that he was still paying off his student loans from the University
of Miami Law school when he entered his tenure as senator. Much of Rubio’s
plan is a joint effort between himself and Senator Mark Warner (D-VA)
called “The Dynamic Student Loan Repayment Act”.
The main purpose of the bill is to simplify President Barack Obama’s
2010 Pay-As-You-Earn (PAYE) plan. The current PAYE plan is somewhat complicated
as it requires students to enter multiple repayment plans at the same
time. Many students don’t even know of its existence. The Dynamic
Student Loan Repayment Act would streamline the process setting a progressive
repayment scale based on income and would pay loans automatically by deducting
payments directly from a paycheck.
Under this proposed system students may not have to worry about defaulting
on loans and will only pay when their diploma is generating “value”.
A borrower would not be liable to make payments while unemployed.
Another major portion of Rubio’s position has been based on access
of information. Rubio working again with Democrat Senator Warner passed “The Student Right to Know Before You Go Act of 2013”. The bill changed the guidelines on college reporting. This allowed
students a better ability to judge school graduation rates, average debts
of students at a school and average earnings in particular areas of study
at a given school.The idea behind this bill was that if students could
better see the value of a given school’s degree then that student
might choose to attend more affordable public college that is comparatively
better than a more expensive private college counterpart.
In addition Rubio has proposed driving down the cost of universities by
encouraging additional competition. Rubio has propositioned that the universities
offer alternative accreditation programs. These programs would offer students
free credits for work experience as well as military experience. He also
believes schools should offer credits for free online course work.
While Hillary Clinton has a split responsibility system, and Senator Rubio
has interest in reforming the system to avoid a student loan crisis, Bernie
Sanders has a much more drastic approach to the hot-button issue of student
loans. Sanders has proposed that congress take
$750 Billion and give it out amongst the states to offer all students free public college.
This idea has been bounced around by many Democrats, chiefly President
Obama and Senator Elizabeth Warren. Only in the case of Obama and Warren,
the proposed coverage is for a 2-year community college. Sanders would
like to take that a step further and provide a free 4-year Bachelors Degree.
He intends to pay for this by shifting the cost of education from the
individual to the collective taxpayers.
Jeb Bush’s stance on Student loan is about university accountability.
In 2012 Bush proposed using federal loans as tool for holding schools
accountable. He stated in multiple interviews that if a college fails
to provide an adequate education to obtain gainful employment they should
not receive federal
student loans. This is a stance he has backed away from in recent years as he refused
to support President Obama’s “Gainful Employment” rule.
More recently Bush expressed interest in the implementation of an incentive
based program where schools would receive tax breaks for taking efforts
to drive down admission costs. He is also a huge supporter of online colleges
such as DeVry and Kaplan. He sees them as a way of creating competition
that will ultimately drive down college costs and at the very least give
less wealthy students a more affordable college option.
Senator Rand Paul has one of the most unique stances on fixing the student
loan system. He believes in making college tuition completely tax deductible.
His proposal came as a response to President Obama’s proposal for
Tuition-Free education. When asked about the President’s idea, Senator Paul responded stating
[rather than shifting the burden of cost on to the taxpayers] “I
have a better idea. Let's let college students deduct the entire cost
of their educations over their working careers”. This plan would
allow students to pay off their debts on their own and let their educations
pay for themselves without having to feel the burden of the debt.