Election renews focus on college debt as burden grows
WASHINGTON — Like many young couples who are starting a life together today, Dan and Sherry Agabiti carry a burden that’s largely unique to their generation — a large amount of college debt.
Dan Agabiti, 28, is a Rhode Island native who wanted the experience of attending college away from home. He enrolled as an outofstate student at the University of Connecticut against the counsel of friends and family who warned him it would cost too much.
Although Agabiti understood when he enrolled that his tuition would be high, he figured he could manage it. What he did not understand when he enrolled 10 years ago, however, was the effect of compound interest on his student loans, which ballooned his payments after graduation to about $1,000 a month.
“Now it’s like we’re paying two rents,” said Agabiti, who graduated in 2013 with a journalism degree and lives in Stratford.
The student debt crisis has transformed the lives of an entire generation and will be an issue in the race for the White House and in congressional races as Democrats and Republicans seek votes from younger Americans.
Millennials came of age during a weak economy caused by the recession of 2008 and a sharp increase in the price of a college degree.
During their lifetimes, college costs have risen significantly, with the net price of tuition, fees, and room and board at a public, fouryear college increasing 68 percent since the 19992000 academic year. The amount college students borrowed annually has doubled since then, too.
As of June 2018, Forbes reported that total U.S. student debt was $1.52 trillion and that 44.2 million people owed money.
Students in Connecticut graduated with the highest student loan debt in 2017, according to The Institute for College Access & Success, a nonprofit group seeking to make higher education more accessible. Connecticut students graduated with an average debt of $38,669, TICAS said.
The crisis of student debt has prompted a slew of potential political solutions.
Progressive Democrats running for president have unveiled a variety of ideas to deal with student debt.
Sen. Bernie Sanders, IVt., released a plan in June that calls for all student debt to be eliminated regardless of family income level, and that students from families with incomes of $25,000 or less would have their college costs covered.
The plan Sanders calls a “revolutionary proposal” would be paid for with a tax on stock trades, bonds, derivatives and other types of investments.
Meanwhile, Sen. Elizabeth Warren, DMass., said she plans to cancel $50,000 in student debt for each person with a household income under $100,000.
Education Secretary Betsy DeVos panned those plans, calling them a “federal takeover of higher education.” She says the burden would be shifted to those Americans who opted not to go to college.
“Their proposals are crazy,” she said. “Who do they think is actually going to pay for these? It’s going to be two of the three Americans that aren’t going to college paying for the one out of three that do. Let’s look at this for what it really is: A federal takeover of higher education.”
Congress has other ideas
Supporters of eliminating the debt that burdens many young Americans say doing so would boost the economy, as young people redirect the money they spent paying down the debt toward purchasing homes and other goods and services — benefiting everyone.
Yet a complete elimination of college debt may be a political bridge too far, and Democrats in Congress are considering more modest proposals.
The U.S. House is moving forward with the College Affordability Act, a bill that would make it easier for students to pay back loans while lowering the cost of college, with new investments in historically black colleges.
The bill, which would set federal policy at the nation’s colleges and universities, would expand Pell Grants and also implement a $94billion program to allow states to offer tuitionfree community college. Instead of canceling studentloan debt, the plan would create “more generous” loanrepayment plans.
Rep. Joe Courtney, D2nd District, a member of the House Committee on Education and Labor that crafted the bill, said eliminating all college debt “is a tall order” that would require a Democratic president to have an “overwhelming mandate” and sizable Democratic majorities in the U.S. House and Senate.
“Clearly we need a much more tangible approach,” Courtney said.
Two of his proposals have been included in the College Affordability Act.
One would allow those who have student debts to refinance their loans at today’s lower interest rates, much like some homeowners refinance their mortgages when interest rates are low.
Agabiti, who pays an average of 5.5 percent interest on his student loans, says allowing refinancing of those loans “would definitely be a huge benefit.” It is also easier to do, both politically and fiscally, than eliminating all student debt.
Courtney’s other proposal that is included in the College Affordability Act would allow young farmers and ranchers to participate along with teachers, nurses, first responders, and other public service professions in a federal program that forgives some student debt for those who go into underserved fields like teaching, public health, and law enforcement.
The Public Service Loan Forgiveness Program provides young people going into those fields with a way to discharge the balance of their student loans following at least 10 years of consistent, ontime payments.
“This will pave the way so that young people going into critical occupations have a manageable financial portfolio,” Courtney said.
Like Courtney, Rep. Jahana Hayes, D5th District, is a member of the House Committee on Education and Labor and helped craft the bill aimed at easing the burden of student debt.
A longtime history teacher and onetime Teacher of the Year who reported at least $115,000 in outstanding student loans when she was running for Congress last year, Hayes contributed a number of provisions in the College Affordability Act.
One would expand Pell Grant eligibility to more than 12 semesters for students who were scammed by for profitcolleges like ITT Tech and Corinthian. The Federal Pell Grant Program provides needbased grants to lowincome undergraduates. The maximum grant was $6,195 for the 20192020 school year.
Other proposals sponsored by Hayes would extend Pell grants to those who are incarcerated, and authorize a new grant program to help universities and colleges provide students with emergency funds when a financial emergency directly impacts or threatens their ability to stay in school.