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July 30, 2019, 9:39 a.m. EDT

Where the 2020 candidates stand on student debt and college affordability

Free college and student-loan refinancing will be up for debate during this election cycle

By Jillian Berman

MarketWatch photo illustration/Getty Images, iStockphoto
It’s a crowded 2020 field.

When Barack Obama ran for president for the last time in 2012, sweeping reform of our college financing system wasn’t even on his agenda, let alone that of his Republican opponent Mitt Romney.

Fast forward just seven years and, in the first few months of the primary contest for the Democratic nomination, candidates have started to stake out their positions on whether to make college free in some form or provide some kind of relief for student-loan borrowers.

‘There is more consensus about the need to go big on college affordability than there has been in previous election cycles.’

—Mark Huelsman, associate director of policy and research at Demos

This cycle’s contest will likely reanimate some of the 2016 debate between Hillary Clinton and Senator Bernie Sanders, an Independent from Vermont, and their supporters and critics over whether debt-free or tuition-free college is the best way to help more students afford higher education, said Mark Huelsman, associate director of policy and research at Demos, a left-leaning think tank.

Though the difference between debt-free and tuition-free college may seem like semantics, the question of which policy is most effective is a matter of debate among left-leaning policymakers and college-finance experts. Proponents of debt-free college argue that by promising students they won’t need to take on debt to afford school — instead of vowing free tuition for all students regardless of need — officials can target resources to students and families who require the most financial help.

Proponents of tuition-free college argue its simple messaging will mean that low-income students actually respond to its promise instead of viewing it as a program that requires a bunch of paperwork and hoops to jump through, like our current financial-aid system. What’s more, they say, offering the benefit to wealthier families could attract the political buy-in necessary to make it possible.

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As the campaign progresses, Democratic candidates will likely debate which among these proposals makes the most sense. The fact that most of them appear to support at least one version of free college shows how normalized the idea has become in Democratic politics over the past several years, Huelsman said.

“There is more consensus about the need to go big on college affordability than there has been in previous election cycles,” he said. “There’s only one candidate that seems to be even pushing back on the notion of an affordability proposal. That’s noteworthy in itself.” (Senator Amy Klobuchar, a Democrat from Minnesota, said in a CNN town hall that she doesn’t support free four-year college for all.)

Borrowers can also likely expect some dramatic proposals for student-debt relief, Huelsman said. In the past, presidential candidates have focused on fixes like streamlining income-driven repayment plans or allowing borrowers to refinance their federal student loans at a lower interest rate.

Consensus among some left-leaning economists and policymakers has been building over the past few years that some form of debt cancellation might actually benefit the economy.

Student-loan refinancing has drawn both praise and skepticism over the past several years; critics note that any student-loan refinance plan would disproportionately benefit borrowers with the most debt, who are more likely to have attended graduate school and, therefore, make a decent living.

But Huelsman said he expects the debt-relief conversation to go beyond student-loan refinancing this election cycle. Consensus among some left-leaning economists and policymakers has been building over the past few years that some form of debt cancellation might actually benefit the economy by freeing up money young people spend servicing their debt for home and car buying as well as other major purchases.

“You’re going to see some pretty bold proposals on debt relief or debt cancellation from candidates,” Huelsman said.

Here’s where the candidates stand on college affordability and student debt relief so far (we’ll continue to update as more information becomes available and more candidates enter the race):

Joe Biden, former vice president and Delaware senator

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The former vice president, who jumped into the race in April, has yet to release any formal proposals on student debt, but his past may provide some insight.

In announcing his decision to sit out the 2016 election, the now 76-year-old said he’d support a plan to make four years of college free.

“We need to commit to 16 years of free public education for all our children,” Biden told reporters at the White House in 2015 . “We all know that 12 years of public education is not enough. As a nation let’s make the same commitment to a college education today that we made to a high school education 100 years ago.”

Though those sentiments put him in line with many of his fellow Democratic candidates, Biden may face some questions on his complicated history with the student loan industry. He backed a bill , signed into law in 2005, that barred borrowers from discharging private student loans in bankruptcy.

In 2015, the Obama administration proposed making it easier for borrowers with private student loans to discharge them in bankruptcy.

Sen. Cory Booker (D-N.J.)

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Booker hasn’t talked much in detail yet about his plans to curb student debt, though he co-sponsored the Debt-Free College Act, a bill introduced by Senator Brian Schatz, a Democrat of Hawaii, that would use federal matching grants incentivize states to invest more money in their public colleges and allow students to attend debt-free.

But one of Booker’s signature proposals aimed at closing the racial wealth gap could provide families with a new resource to pay for college. Booker, a Democrat from New Jersey, introduced a bill last year that would provide an account with $1,000 to every baby born in the U.S. The accounts, dubbed baby bonds, would be eligible for an up to $2,000 deposit each year depending on family income.

The funds would sit an account managed by the Treasury Department where they would earn about 3% in interest. At age 18, the account holders could tap the money to pay for college or buy a home.

Seeding children with some sort of savings account has been popular in some policy circles for years. San Francisco is one of a handful of cities across the country that provides children with an account to save for college.

Research indicates that when children know there’s some money saved for them, they’re more likely to attend college. But the idea behind Booker’s proposal is even broader: To provide every American child with the type of nest-egg already available to most wealthy children to help build their future.

“This proposal is about helping families break through barriers that keep so many Americans from wealth-creating opportunities,” Booker, 49, said in a statement announcing the plan called the American Opportunity Accounts Act.

Pete Buttigieg, mayor of South Bend, Indiana

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After initially expressing some hesitancy towards the idea of free college, the 37-year-old mayor has embraced at least a form of it.

If elected, Buttigieg would work to make public college debt-free for low-income students, according to a proposal his campaign released in May. Buttigieg is proposing to do this through creating a state-federal partnership and combining it with an expansion in the Pell grant, the money the government provides to low-income students to attend college. Under his plan, middle-income families would pay zero tuition at public colleges.

In addition, Buttigieg — who, together with his husband Chasten is coping with six-figure student debt — is proposing to “confront the student loan problem,” provide more support for borrowers entering public service and “apply strict standards” to for-profit colleges, though he didn’t provide much detail for how he’d implement these proposals.

The Navy veteran also unveiled a national service proposal of his own in July that would expand the PeaceCorps, AmeriCorps and create new national service organizations, including one focused on climate change. Under his plan, the number of paid national service positions would grow from 75,000 to 250,000 with a goal of getting 1 million Americans in these positions by 2026.

Participants would be considered for debt forgiveness, among other benefits, according to campaign materials. Under his proposal, participants who serve at least a year would be credited that time towards the Public Service Loan Forgiveness, the beleaguered program that allows public servants who pay their federal loans for 10 years to have the remaining debt wiped away, the New York Times reported.

John Delaney, former Maryland Congressman

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Delaney, 56, has proposed making two years of community college or career training free through a federal-state partnership. Under his plan, states would need to maintain their higher education funding levels and create seamless pathways for students to transfer from two-year to four-year public colleges, in order to be eligible for the program.

The former Maryland congressman is also proposing to give borrowers who use income-driven repayment plans to pay off their debt access to forgiveness two years earlier than what’s available currently, reduce interest rates on student loans and allow borrowers with private loans to refinance up to $27,000 through the federal government.

He’s also vowed in campaign materials to defend the gainful employment rule, an Obama-era regulation aimed at ensuring that career colleges are effectively preparing students for jobs. The Department of Education under Betsy DeVos recently repealed that rule .

In addition, Delaney is pitching a national service program, where young people could participate in the military or programs addressing climate, community or infrastructure and receive a scholarship in exchange.

Julián Castro, Obama-era Secretary of Housing and Urban Development and former mayor of San Antonio

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The former mayor of San Antonio released an ambitious pre-K through college education plan in May that offers insight into how he would address student debt and college affordability, if elected.

Like many of his fellow Democrats, Castro, 44, is proposing to make public college tuition-free. But he also laid out a slew of other reforms to the higher education and student loan systems. Among them:

— He’s proposing tweaks to the current income-driven repayment system, which allows borrowers to pay off their debt as an affordable percentage of their income. Those include raising the threshold at which a borrower could stay current on her debt with zero dollar payments to borrowers earning 250% of the poverty line, up from 150% currently . In addition, for these borrowers interest wouldn’t accrue on their loans for three years. After three years, half of the interest would be exempted.

Borrowers would also be able to have their loans forgiven, tax-free, after 20 years of payments, under Castro’s plan. Right now, borrowers can have their loans discharged after 20 years in some cases, but the forgiveness is taxed.

— In addition, Castro is proposing to expand the Pell grant, the money the government provides to low-income students to attend college, to a maximum grant of $10,000, ( up from $6,195 for the 2019-2020 academic year).

— Castro said he’d also create a loan forgiveness program that allows borrowers who receive certain types of federal assistance for any three years out of a five-year period to have a portion of their loans forgiven.

— And, like Sen. Elizabeth Warren, a Massachusetts Democrat, Castro is pitching an end to public funding of for-profit colleges.

Rep. Tulsi Gabbard (D-Hawaii)

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During her tenure in Congress, Gabbard has supported the idea of free college, including by co-sponsoring the House version of Sanders’ College for All Act.

Gabbard, 37, who twice served in the military in the Middle East and who is currently a major in the U.S. National Guard, has also been active around veteran education issues, including introducing legislation last year to improve and expand GI Bill benefits that veterans can use to pay for their education.

Sen. Kirsten Gillibrand (D-N.Y.)

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Gillibrand, 52, has made national service a key part of her proposals to address student debt and college affordability. Under a plan the New York Senator released earlier this summer, Americans who commit to one year of public service would receive two years worth of college tuition-free. Those who commit to two years of service would have four-years paid for.

Qualifying roles include, working as special education aides and teaching assistants, home health aides and nurses for nonprofit organizations and other jobs in federal, state and local government, Gillibrand wrote in a June op-ed on FoxNews.com .

People interested in participating in public service who already have a college degree or don’t want to go to public college can use the financial assistance provided through the program to attend graduate school, pay off student debt or for certain other categories.

In addition to her national service program, Gillibrand has indicated she’d be interested in addressing college costs and student debt in other ways.

One of the first things she’d do as president, she wrote in a February tweet (NYS:TWTR) , is allow borrowers to refinance their loans at a 4% interest rate. (Undergraduate students who took out a loan this year had an interest rate of 5.05% and graduate students borrowed from the federal government at a minimum interest rate of 6.6%).

“Student debt is at a crisis level in this country, and it holds our whole economy down,” Gillibrand tweeted.

Sen. Kamala Harris (D-Calif.)

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Harris unveiled a proposal in July to cancel up to $20,000 in student debt for borrowers who received Pell grants — the money the government provides to low-income students to attend college — if they start a business and operate it in a disadvantaged community for at least three years.

In addition, under Harris’ proposal, these borrowers would have their loans deferred interest-free for an up to three year business formation period.

The proposal is part of a broader plan from Harris to address the black-white gap in opportunities accessing high-paying jobs in certain fields and starting businesses. As part of the plan, Harris would invest $60 billion in science, technology, engineering and math education at Historically Black Colleges and Universities.

In addition to her debt-forgiveness plan, Harris, who also co-sponsored Shatz’s bill, has pitched making community college free and four-year public college debt-free. If elected, the California senator, said she’d also allow borrowers to refinance their loans at lower interest rates and expand the income-driven repayment program, which allows borrowers to repay their loans as a percentage of their income.

Harris, 54, also indicated she’d take an aggressive stance towards for-profit colleges, citing her work as California attorney general uncovering fraud at the now-defunct Corinthian Colleges, once one of the largest for-profit college chains in the country. Harris’ office won a more than $1 billion judgement against the school.

We need to get rid of the for-profit colleges that are preying on students like you,” Harris told a college student during her CNN town hall .

Over the past several years, for-profit colleges have been accused of using misleading job placement and graduate rates to lure students and their financial-aid dollars, but providing them with little in the way of marketable credentials. The Obama administration worked to crack down on the industry though the Trump administration has worked to make that oversight more lax.

John Hickenlooper, former governor of Colorado

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The former governor of Colorado has yet to release a formal plan to address student debt and college affordability, but in interviews and speeches he’s provided some indication of how he’d approach the issue.

Hickenlooper, 67, told the business news site Cheddar that if elected, he would bring the interest rate on student loans down to 2.5% “or as low as I can get it without taking any risk.”

“Student debt, without question, it is a drag on the economy,” Hickenlooper said. He added that the conventional wisdom that millennials don’t want to get married, buy homes or have kids is wrong. Instead, he said, “they just can’t afford to.”

“Somehow we have to help,” Hickenlooper said, expressing support for the idea of allowing borrowers to work off some of their debt in exchange for public service. (Federal student loan borrowers working in public service can already have their student loans forgiven after 10 years through a program called Public Service Loan Forgiveness).

Hickenlooper has also said he would make community college free , if elected.

Sen. Amy Klobuchar (D-Minn.)

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Klobuchar appears to be the first mainstream Democratic candidate to push back on the idea of debt-free or tuition-free four-year college. “I am not for free four-year college for all, no,” Klobuchar told the audience at her CNN town hall in February. “I wish — if I were a magic genie and could give that to everyone and we could afford it, I would.”

Klobuchar, 58, explained that given the level of the national debt, she doesn’t believe the country can afford a four-year free college program. Still, Klobuchar, who represents Minnesota, said she’d support some policies that could help ease the burden of college costs and student debt, including making two-year degrees and community college free, expanding Pell grants — the money the government provides low-income students to attend college — and allowing borrowers to refinance their student loans.

In addition, Klobuchar has signaled she’d be interested in making it easier for students to afford job training programs that don’t fit in with the traditional image of a college education. She introduced a bill earlier this year that would allow workers to use 529 plans — tax-advantaged college savings accounts — for licensing, credentialing and other short-term training programs.

Wayne Messam, mayor of Miramar, Florida

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Student debt and college affordability were featured prominently in Wayne Messam’s first speech as a presidential candidate in late March. Messam, mayor of Miramar, Florida, and a former college football player, said that if elected he’d throw his support behind the idea of national student debt forgiveness. Messam, 44, proposed paying for the debt relief by repealing the tax cuts pushed by President Donald Trump and congressional Republicans in 2017.

In the speech, Messam cited research indicating that large scale student debt forgiveness would boost the economy. And indeed, a 2018 study from left-leaning economists indicates that wiping away student debt would free up borrowers’ to make other large purchases, like homes and cars, fueling economic growth.

“It’s time we boost our economy and give Americans a second chance at the American Dream,” Messam told supporters.

Seth Moulton, Massachusetts Congressman

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Democratic presidential candidate Rep. Seth Moulton (D-MA) (Photo by Scott Eisen/Getty Images).

A Massachusetts congressman and veteran of the Iraq war, Moulton has centered his higher education proposal around a call to national service. Moulton’s plan , which he announced in May, would offer Americans between the ages of 17 and 24 an incentive to take part in some form of public service, whether it’s the military, Americorps or a new Federal Green Corps he plans to launch to fight the effects of climate change.

Young people who participate in these programs for at least one year would receive an education benefit equal to 60% of the cost of in-state tuition or a job-training benefit worth $14,000. Young adults who work for three years would get their full in-state tuition bill covered.

During a CNN townhall in early June, the 40-year-old Moulton, who still has student loans of his own, declined to endorse a broad free college proposal, describing it as “a great aspiration.” He said he’d consider a student debt forgiveness plan, but addressing the needs of Americans who didn’t go to college would be “my first priority.”

Beto O’Rourke, former Texas congressman and candidate for Senate

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In June, the former congressman and U.S. Senate candidate, unveiled a plan to alleviate student debt for public school educators as part of a broader proposal to address structural inequality in education.

Already, public school educators can have their federal loans forgiven after 10 years of work through the Public Service Loan Forgiveness program. But under O’Rourke’s plan, teachers who have worked in public schools for at least five years would automatically have their debt forgiven.

Teachers who have worked in public schools for less than five years would have their student loan payments suspended while they continued to teach, and have their loan balance forgiven by 20% for each year of service, under O’Rourke’s proposal. In addition, other public servants would have 10% of their debt load forgiven for each year of service.

O’Rourke, 46, hasn’t released a plan to address college costs specifically, but at events in Iowa and South Carolina, he’s indicated support for free community college and debt-free public college.

Sen. Bernie Sanders (I-Vt.)

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Sanders’ 2016 campaign for president brought the idea that students should be able to attend public colleges tuition free into the mainstream — a position it appears he will continue to push during his 2020 campaign.

But he’s also going further, by vowing to cancel all of the nation’s outstanding student debt.

Sanders, 77 unveiled a bill in June that would wipe away student debt for 45 million borrowers and make public college tuition-free. Under his proposal students from families with incomes of $25,000 or less would also have all of their college costs covered. He plans to pay for the plan, which his campaign estimates will cost $2.2 trillion through a tax on certain types of investments.

With his proposal, Sanders became the second presidential candidate (after Senator Elizabeth Warren) to back student-debt cancellation, an idea that’s traveled from Occupy Wall Street to the national political stage.

Still, their plans differ. Under Warren’s plan, borrowers earning $250,000 or more wouldn’t receive any debt relief — a nod to concerns that wealthier student loan borrowers often receive the biggest benefit, at least measured in dollars, from student debt cancellation.

Sanders offers debt cancellation to borrowers regardless of their incomes — a controversial idea, given that some wealthy borrowers would certainly benefit from the plan — but one that fits in with Sanders’ history of offering sweeping universal proposals.

“I happen to believe in universality,” Sanders said during the press conference announcing his student-debt relief proposal. “That means if Donald Trump wants to send his grandchildren to public school, he has the right to do that. Our response to making sure that this does not benefit the wealthy is in other areas where we are going to demand the wealthy and other corporations start paying their fair share in taxes.

Sen. Elizabeth Warren (D-Mass.)

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During her tenure in the Senate, Warren has regularly used her role to call attention to challenges students and families face affording college and repaying student loans. As a presidential candidate, she unveiled the most dramatic proposal to address these issues.

Under Warren’s plan, which she released in April, a large swath of student-loan borrowers could have at least part of their debt cancelled. Borrowers with a household income of less than $100,000 would have $50,000 in student debt cancelled, borrowers with a household income between $100,000 and $250,000 would be eligible for some debt cancellation, though not the full $50,000 and borrowers with a household income of $250,000 or more would receive no forgiveness.

In addition to the debt-cancellation plan, Warren is also proposing to make public colleges tuition-free and to dramatically expand the Pell grant, the money the government gives low-income students to attend college.

Warren plans to fund the proposal, which her camp estimates will cost $1.25 trillion over 10 years, with a tax on the super-rich. Warren announced in June that she plans to introduce a student debt cancellation bill in the Senate that reflects her campaign proposal.

Supporters have hailed Warren’s plan as offering a progressive version of debt cancellation, which in the past critics have derided as providing an out-sized benefit to borrowers with large debt loads (often, but not always a proxy for high incomes).

Similarly, by combining tuition-free college with a Pell grant expansion, Warren’s supporters say her proposal offers a benefit to all prospective students, including low-income students who already have their tuition covered by Pell grants and other sources, by expanding the funding available for living expenses.

Critics have argued that Warren’s plan would still give a boost to some college graduates who benefited from their degree in the form of higher earnings.

Andrew Yang, entrepreneur

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Though he’s perhaps best known for his proposal to establish a universal basic income, entrepreneur-turned-presidential candidate Andrew Yang also has a series of proposals on college affordability and student debt.

Yang, who most recently worked as the founder of Venture for America, an organization that works with entrepreneurs in various cities across the country, has said if elected , he’d explore a partial reduction in student loan principal for recent graduates and a plan whereby the federal government would buy up all the outstanding student debt and allow borrowers to repay their loans by putting 10% of their income toward their loans for 10 years.

If elected, Yang said he would also take steps to curb the cost of college, including exploring a plan that would reduce the ratio of college administrators to students, require university presidents to meet yearly with alumni groups to understand their job prospects and require colleges with endowments over $30 billion to contribute 1% of their endowment per year to help found a new university.

In addition to these relatively unique proposals, Yang, 44, who worked in a variety of fields, including education and health care before launching his campaign, appears to support some more widely discussed initiatives, including expanding loan forgiveness for borrowers who work in underserved communities and creating a more robust college information database for the public.

This story was originally published on Feb. 20, 2019.

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