November 5, 2015
Current student loan debt stands at more than $1 trillion, with students graduating from four-year colleges and universities with the highest debt in the nation’s history. As such, it’s not surprising that the 2016 presidential candidates are being asked how they plan to tackle the student debt crisis, should they be elected the next president. With that said, here’s a look at where four of the leading Democratic candidates stand on student loan debt:
Clinton’s plan for making college more affordable and reducing student debt comes with a $350 billion price tag over ten years, and will be funded in part by limiting the itemized deduction values that wealthy families may claim on their taxes. Unlike other Democratic candidates who promise to end tuition debt entirely, Clinton’s plan does require a family/student contribution and includes new student loan refinancing options.
Her plan earmarks roughly $175 billion in grants for states which guarantees students will be able to attend a four-year public college without having to secure loans. It also calls for allowing graduates to refinance student loans at lower interest rates and allowing students to use Pell Grants to cover living expenses. In addition, she promises to grow the AmeriCorps program (which provides an education benefit) from 75,000 members to 250,000 members. Finally, colleges whose graduates are unable to repay their loans will be penalized under Clinton’s plan.
Sanders released his College Act for All earlier this spring which would make public colleges and universities 100% tuition-free, and comes with a $47 billion annual price tag. Sanders’ plan would be largely funded through his “Robin Hood Tax on Wall Street,” which will impose fees of .5% on stock trades, .1% on bonds, and .005% on derivatives. Individual states will be responsible for covering the remaining 33% of the cost to make public colleges and universities tuition-free.
In addition, Sanders’ plan calls for eliminating any federal profit resulting from student debt and allowing students to refinance their existing student loans at more favorable rates, bringing student loan interest rates down as low as 2.32%, with an assurance that his legislation would cap all interest rates at 8.25%. Furthermore, his plan eliminates any payment requirements for middle-class families and allows students to use federal, state, and institutional need-based aid to cover expenses such as room and board and books. Sanders would also triple the size of the federal work-study program to expand on the number of students and schools that can participate and offer employment, with a special focus on funding for schools that enroll large numbers of low-income students.
Democratic candidate Martin O’Malley has called for freezing state tuition rates, in addition to capping tuition at public four-year colleges and universities to no more than 10% of each state’s median income. He has also suggested that existing income-based repayment programs be expanded upon, and low- and middle-income students enrolled in these programs should have their monthly loan payments capped at 10% of their take-home pay. Eventually, those who take advantage of these programs will have the balance on their loans forgiven. O’Malley is also a proponent of allowing students to refinance their current student loans at lower interest rates.
Lawrence Lessig dropped out of the Presidential race on November 2nd. Before his departure, Lessig acknowledged that student debt is an issue that must be addressed by Congress and has said on the record that he would support reducing the interest rates on student loans, as well as making sure that students are able to refinance their loans. However, he had not released a specific plan for how this should be accomplished.
Now that you know the democrats positions, check out what the republican candidates are saying about student loan debt.
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