Democrats Are Campaigning on Student Loan Reform—Will Their Ideas Work?

No one seems to know how to wrangle costs at private universities, but public schools could get a real makeover if one of these hopefuls is elected.

Democratic presidential candidate Hillary Clinton speaks at a town hall meeting at Exeter High School in New Hampshire on Aug. 10. Clinton discussed college affordability and student debt relief. (Photo:Darren McCollester/Getty Images)

Aug 12, 2015· 2 MIN READ
A veteran journalist and former White House correspondent for Politico, Joseph Williams is a freelance writer, blogger, and essayist in Washington, D.C.

Democratic presidential hopeful Hillary Clinton unveiled a blockbuster plan to make college affordable again earlier this week, becoming the third major politician to do so ahead of the 2016 presidential election.

“No family and no student should have to borrow to pay tuition at a public college or university,” said the former secretary of state. “And everyone who has student debt should be able to finance it at lower rates.”

Just as with similar proposals from fellow politicians vying to be the Democrat candidate, Vermont Sen. Bernie Sanders and former Maryland Gov. Martin O’Malley, political analysts pointed to the devils in the details of Clinton’s plan, including the 10-year, $350 billion taxpayer price tag. Even as the cost of college continues to skyrocket, they say, opposition lawmakers in Washington would probably water down, sidetrack, or kill the plan.

Yet Megan McClean, a financial aid policy expert, thinks Clinton’s blue-sky plan—and the clouds of skepticism swirling around it—are both good things for the next generation of college-bound high school students.

She says the seeming flurry of plans to attack the staggering price of a college diploma—from President Obama’s plan to eliminate tuition at community colleges to Clinton’s idea to drastically reduce it at public four-year schools—is officially on the nation’s front burner, just in time for the 2016 presidential election.

“It’s heartening to see that this is going to be a big issue,” said McClean, managing director of policy and federal relations for the National Association of Student Financial Aid Administrators. In the 2012 presidential election, she notes, college affordability got short shrift, with hardly a mention on the campaign trail.

Now, “whether or not [the Democrats’ plans] are feasible as they’re structured right now, it gets people talking and thinking about these issues,” she said.

Clinton’s plan, in broad strokes, calls for the federal government, state legislatures, and colleges themselves to make investments that would drop tuition to the point where a standard middle-class family wouldn’t need to take out a loan to pay for it.

Money for the federal investment would come by closing certain tax loopholes for high-end learners and giving working- and middle-class families permanent tax breaks to help pay for books and living expenses.

In May, Sanders rolled out his idea to make college affordable: bring down the cost of a diploma at a public four-year school to zero, largely through taxes on major Wall Street transactions. If his long-shot plan were to become reality, it would cost $750 billion, more than twice what Clinton has proposed, but would require students to pay for books and room and board themselves.

RELATED: Bernie Sanders’ Plan for Free College Could End Racial Disparities in Higher Ed

Last month, however, O’Malley—a possible dark horse who is also a former mayor of Baltimore—debuted his college-affordability plan, which he says addresses the cause of the problem as well as the symptoms. He’s proposed a series of steps that would bring down state university tuition rates, raise the amount of Pell Grants to low-income students, and tether loan repayments to student income.

McClean says she’s pleased to hear candidates talking about federal investments as a way to make college affordable. While there are several factors that caused tuition to spike at state universities, the reduction of federal grants—which was a robust 70 percent of tuition in the 1970s but now covers just 30 percent—is a significant factor.

“We were providing a lot more investment at the federal level,” she said. “Schools had to kind of find that money somehow” and ultimately shifted the burden to the students, who now graduate from four-year schools with an average of $30,000 in debt.

While all three plans are probably going to run into stiff resistance in a Republican-dominated Congress that’s happier cutting taxes than spending money, McClean said leaders are recognizing that college is “without a doubt” an investment that pays off in earnings for the individual and benefits for the nation.

Ultimately, seeing candidates bat around more than one idea shows “you have some of the best minds thinking about it,” she said, “and that’s a good thing.”