With the crisis of ballooning college costs and student debt in the U.S., 2016 presidential candidates are looking for ways to tackle this monumental issue. It is a looming problem that stunts economic growth and makes it difficult for some parents to buy houses, save for their children’s education and their own retirement.
While legislation has been passed to lower interest rates, the current amount for student loan debt is $1.2 trillion dollars. In part, the debt is rising, because there are more students going to college and they’re borrowing more money.
While interest rates have dropped in recent years, the average for each borrower is $29,000. Students who attend private colleges could owe $100,000 plus.
Below is each candidate’s higher education plan:
Hillary Clinton – The New College Compact
- Tuition-free community college
- Debt-free public four-year college
- Cutting interest rates on federal student loans
- Government student loan refinancing for borrowers with existing federal loans
- Making income-based repayment the default plan for all borrowers
- Expand work study program for students
Clinton would pay for her plan by closing tax loopholes for the wealthy.
Ted Cruz – Deregulate Education
- Abolishing the U.S. Department of Education and reallocating education funding to states
In 2014, Cruz voted against letting borrowers refinance their federal loans with the government.
John Kasich -State Education
- Downsizing the U.S. Department of Education and reallocating education funding to states
- Expanding high school students’ access to courses that provide college credit
- Tying government funding for public colleges and universities to graduation rates
Throughout the presidential campaign, Kasich has advocated for stronger state involvement in education issues and a reduced role for the federal government.
Bernie Sanders – Debt-free College
- Tuition-free public college
- Cutting interest rates on federal student loans
- Government student loan refinancing for borrowers with existing federal loans
Sanders would fund his program by imposing taxes on certain stock, bond and derivatives trades.
Donald Trump – No Government Profit
- Reforming the federal student loans system so the federal government doesn’t profit from student loans
- Cutting the Department of Education’s budget
Results for each plan
If we followed Senator Ted Cruz’s and Donald Trump’s plans, it would mean defunding all Pell grants, there would be no new federal student loans and no Title IX enforcement. It would cause several colleges to close, due to of the lack of federal money, and less people would be able to attend college.
It would also mean going back to the guaranteed lending, or as it’s known in Washington DC., corporate welfare. However, it should be noted that The Department of Education subsidized the banks when this system was in place.
Governor John Kasich’s strategy places the burden on the states, so there would be pressure for tax increases.
Senator Bernie Sander’s plan: funding free college is unrealistic. The cost is $70 billion per year and, as with other government entitlements, it will drive up taxes and ultimately the national deficit.
Hillary Clinton’s proposal addresses affordability concerns and demands accountability at the institution and state level. However, it doesn’t target relief to the borrowers who need it the most.
Since strategies from the Democratic and Republican candidates are very different, it’s not likely either party would be receptive to the other’s policies. Once again gridlock would halt progress.
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