Clinton Unveils Plan to Solve Student Debt and High Tuition Costs - Higher Education
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Clinton Unveils Plan to Solve Student Debt and High Tuition Costs


by Catherine Morris

Senator Hillary Clinton

Former U.S. Senator Hillary Clinton

Former U.S. Senator and presidential hopeful Hillary Clinton unveiled her higher education plan at a campaign stop on Monday. Clinton’s New College Compact is a far-ranging proposal that extends beyond solving the problem of excessive student debt and rising college tuition costs.

The plan would reinforce and increase state investment in higher education, increase support for minority serving institutions, cut interest rates on federal student loans and expand AmeriCorps. As American College on Education President Molly Corbett Broad said, it “is a big, bold and complex proposal.”

Mounting student debt and the skyrocketing cost of college has long been a major concern for students and families. The current outstanding loan debt totals $1.2 trillion and counting, inspiring attention-grabbing headlines asking questions like “Will Student Loan Debt Be the Next Bubble to Burst?” Economists fret that students chained down by loan repayment plans will put off buying homes and starting a family.

The New College Compact would provide grants to states that would go to colleges, provided that schools promised to set their tuitions low enough that students could pay for them without taking out loans. While the major driver of tuition reductions would be reviving state investment in higher education, the plan also suggests that colleges prune back on their expenses as well, specifically at the administrative level and by moving some classes or credits online.

At the community college level, tuition would be free. Pell grants would be used not to pay for tuition and fees, but for low income students’ living expenses. “We’re going to make community college free,” Clinton said in Exeter, NH, on Monday. “That’s President Obama’s plan, and we’re going to do it.”

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Clinton’s plan would also tackle student debt by cutting interest rates on federal student loans in half, with the explicit goal of eliminating any profit to the federal government on student loans. Graduates would also have the option of refinancing their debt loads at the new interest rates.

According to Experian, 40 million people had some student loan debt in 2014, a sharp increase from 29 million in 2008. While there are many horror stories of college graduates with six-figure debt loads, the average college graduate had $29,000 in debt in 2014. The Public Service Loan Forgiveness Program forgives the remaining debt balance for students who work full-time in certain public sector jobs and meet 120 monthly payments.

Under Clinton’s proposal, loan forgiveness would get an overhaul. Students would pay back their loans out of their discretionary income over a period of 20 years, at which point any remaining debt would be forgiven.

The New College Compact weaves together ideas favored by Democrats, such as free community college, and other proposals that have garnered bipartisan support, such as the proposed bipartisan Student Protection and Success Act, which argues that colleges need “more skin in the game.” When students amass a large debt burden, or default on their loans, colleges generally are not held accountable. Clinton’s plan would penalize such colleges. “It’s time to show some tough love to colleges and universities,” Clinton said.

Altogether, the plan would cost $350 billion over the next 10 years, although the specifics on that are still a bit hazy. According to documents released by the Clinton campaign prior to Monday, the money would be raised by closing tax loopholes “for the most fortunate.” One-third would go toward student loan relief and more than half would go to grants to colleges and states.

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With her proposal, Clinton joins the ranks of two other presidential candidates vying for the Democratic nomination, such as Bernie Sanders and Martin O’Malley. Sanders introduced a bill in May to eliminate college tuition at four-year public colleges.

Staff writer Catherine Morris can be reached at

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