When it comes to college affordability, Sen. Elizabeth Warren (D-Mass.) is a longtime champion for low- and middle-income families. On June 10, she reached beyond recent calls for student loan forgiveness and free community college to urge the nation not just toward lower or more manageable debt, but toward an entirely debt-free education. The upcoming reauthorization of the Higher Education Act could be just the opportunity to move in that direction.
“Every kid needs a debt-free option—a strong public university where it’s possible to get a great education without taking on loads of debt,” said Warren. Drawing a line between personal success and a thriving economy, she added, “It’s time to open the doors of opportunity wider and to invest in our future.”
Warren, who unveiled her proposal at the Shanker Institute and AFT Reclaiming the Promise of Public Education Conversation Series, placed responsibility squarely on colleges, states and the federal government, noting specific actions each could take to ease the debt she says is drowning young people, and drowning the country’s future.
Colleges, she said, must have more “skin in the game.” Currently, when students default on their loans, it is taxpayers who make up the difference, not colleges. Warren suggests:
- Making colleges more accountable for cutting costs and boosting graduation rates—provided the accountability measures are responsible and effective, rather than arbitrary and punitive.
- Ensuring that colleges spend financial aid dollars on educating students, rather than on high administrative salaries and elaborate marketing.
- Incentivizing colleges to cut costs with shared savings programs that would help students graduate in less time—four years instead of six—and save money on Pell Grants and other financial aid.
Warren slammed states for cutting funds to higher education, noting that in Arizona, spending per student is down by almost 50 percent, while tuition at four-year public colleges has risen by 80 percent. She called for:
- A halt to state cuts in higher education. “This is simple math,” she said. “As states cut back their support, tuition goes up and families have to pick up the bill.”
- Refinancing student loans. Warren said that student loan rates are typically higher than the borrowing costs to the states, so states could afford to provide refinancing for both public and private student loans. North Dakota is a good example: The state recently refinanced more than $125 million in loans, for 3,000 borrowers.
The federal government must step up as well, said Warren. In particular, “the federal government should not profit from student loans—period,” she said. “The debate over the right interest rates should be between whether the program should break even or be subsidized—not over how big the profits should be.”
She also recommended that the federal government:
- Leverage federal dollars to support state incentives that would increase public funding of higher education.
- Fix the Pell program so that more grant money is available year-round, and so that the funding is mandatory, rather than subject to budget fights each year.
- Simplify the application process for federal aid—a process that keeps many students from applying for financial aid, and from attending college at all.
- Enforce existing laws protecting students from unreasonable debt, and provide transparency in the Department of Education. “Show that there is a real cop on the beat,” she said, rather than a government that protects schools when they violate financial aid regulations.
“The time has come to be bold,” AFT President Randi Weingarten said. “Sen. Warren’s proposals share wide bipartisan support in Congress. The question remains: Does Congress have the political will to find common ground and change the landscape for the future of higher education in our country?”
Without these sorts of changes, said Warren, “this country is in trouble.” Young people are unable to afford college just as 59 percent of American jobs require a postsecondary education. “Degrees push us forward,” said Warren. “Debt holds us back.” Last year, student loan debt jumped another $100 billion—with low- and middle-income families hit hardest.
“Our economy cannot flourish if we do not have enough college-educated workers,” said Warren. “It’s time to dramatically reform higher education.”
Warren’s presentation was followed by a rich panel discussion exploring other possibilities for easing student debt.
Among the many ideas presented: Sara Goldrick-Rab, a professor of educational policy studies and sociology at the University of Wisconsin-Madison and part of the intellectual momentum behind President Obama’s free community college policy, suggested a “first degree free” approach, and the possibility of four-year colleges granting associate degrees to students who have earned sufficient credits but have not yet completed a four-year program. She called for more simplicity and transparency in a system that has become “a bureaucratic nightmare,” and suggested that tinkering is no longer a sufficient fix—we need a “fresh start.”
Beth Huang, with the Student Labor Action Project, advocated for more collaborative organizing and solidarity among students, faculty and workers. And Zakiya Smith, a strategy director at the Lumina Foundation, recalled the original intent of student loan programs, designed to give a meaningful helping hand, not to saddle students with debt for life. “We’ve created something that people are afraid of, that chases them down in retirement and garnishes their Social Security,” she said. “Somehow we messed up.”
[Virginia Myers, AFT press release]
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