Student debt is emerging as a high-profile political issue in the 2016 presidential election, with contenders from both parties proposing ways to make college more affordable—or even free.
Both Democrats and Republicans view student debt as an issue that can be used to mobilize younger voters. According to data from the New York Federal Reserve, 65% of student loans are held by Americans younger than 39. "Student debt is often the defining economic fact of [young voters'] lives," says Democratic pollster Geoff Garin.
College affordability also weighs heavily on parents; around 73% of parents with children under 18 say they are concerned about paying for college, according to a recent Gallup poll. However, Democrats and Republicans differ on how to reduce student debt.
Hillary Clinton, the Democratic frontrunner in 2016, told reporters in Iowa last week it was important to "move toward making college as debt-free as possible." And in April, she came out in support of President Obama's proposal to provide free community college.
Sen. Bernie Sanders (I-Vermont), who is registered Independent but is seeking the Democratic nomination, introduced legislation last Tuesday that would eliminate tuition at public four-year schools. The proposal would also aid students at private colleges by increasing work-study opportunities. According to Sanders, the plan would cost $70 billion annually and be funded by taxes on financial transactions and matching funds from states.
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Democratic enthusiasm for proposals to address student debt can partially be traced to an influential paper released last September by the left-leaning think tank Demos. The paper called for a $30 billion increase in federal funding for higher education that would be partly matched by the states.
Conservative groups and Republican candidates also say student debt is an important issue to voters.
"The crisis of college affordability has marched up the income spectrum in a way that it hadn't in past cycles, and it's going to be a defining issue for the middle class," says Andrew Kelly, of the conservative-leaning American Enterprise Institute.
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However, Kelly is critical of the Democratic approach to solving the problem. "They've made the issue about how much we spend rather [than] how we spend it. And that's been a mistake," he says. Kelly has proposed penalizing colleges for defaults on student loans as a way to incent affordability and promote quality.
A bipartisan bill from Sens. Marco Rubio (R-Florida), who is also running for president, and Mark Warner (D-Virginia) introduced last year suggests there are some common approaches to solving the problem. The bill would allow borrowers to repay federal student loans via an automatic 10% deduction from their paycheck. The proposal is similar to the existing Pay as You Earn plan for federal borrowers, but would cap the amount of loan forgiveness borrowers could receive after 20 years at $57,500.
Sen. Rand Paul (R-Kentucky) announced a plan last month to allow graduates to deduct the cost of their education over the course of their careers. Paul is also running for president.
However, much of the substantive action by Republicans recently has pushed to reduce funding for education at both the state and federal level. For instance, congressional Republicans passed a budget plan earlier this month that would eliminate guaranteed funding for Pell Grants and undo the expansion of income-based repayment programs. The budget plan is nonbinding, but is a statement of legislative priorities.
At the state level Wisconsin Gov. Scott Walker (R), who is widely expected to seek the Republican nomination, has been engaged in a high-profile fight to reduce funding for the University of Wisconsin System by $300 million. Another presumptive Republican candidate, Louisiana Gov. Bobby Jindal, has also pushed for significant cuts to higher education.
Peter Wehner, a senior fellow at the conservative Ethics and Public Policy Center, says the Republican approach is about fiscal responsibility. "Just because the Democrats decided they want to spend record levels and you put the brakes on that doesn't mean you are an enemy of students," he explains (Douglas-Gabriel, Washington Post, 5/24; Belkin, Wall Street Journal, 5/21).
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