Student loan debt is a hot topic these days, with Forbes reporting that 45 million individuals hold more than $1.5 trillion in that debt.
On April 22, Sen. Brian Schatz (D-Hawaii) and Rep. Mark Pocan (D-Wis) reintroduced the Debt Free College Act, to provide incentives to states in return for increased investment in public higher education and providing students with debt-free college.
“When we talk about the student loan debt crisis, we're not just talking about tuition. We're talking about the real costs to students and their families — which includes books, room and board, transportation and supplies. These expenses have forced 45 million Americans to take on debt to cover the full cost of their education. That's what makes the Debt-Free College Act unique: It goes beyond tuition to restore the path to affordable college,” Schatz wrote in a May 7 Facebook post. “I reintroduced this bill so we can bring states back to the table and leverage federal dollars to reinvest in public higher education.”
The Debt-Free College Act would establish a state-federal partnership that provides a dollar-for-dollar federal match to state higher education appropriations in exchange for a commitment to help students pay for the full cost of attendance without having to take on debt. The bicameral legislation, first introduced in 2018, was the first proposal to go beyond free tuition, and ensure that students leave college without the financial burden of student loan debt.
Vox reports that this plan is different from other options put forth by Sen. Bernie Sanders, or Hillary Clinton in that it focuses on debt, not just tuition, and also includes living expenses. College debt has more than tripled since 2006 and now exceeds $1.7 trillion dollars, which is second only to mortgage debt and surpasses even credit card debt.
And, student loan debt is causing problems in other areas of life too. The Federal Reserve Bank of New York notes that student loan debt is responsible for 35% of the decline in homeownership since 2007. The percentage of younger people who reported owning a business was cut in half between 2010 and 2013. Pew Research Center also found that about half of student borrowers say that their loans increase their risk of defaulting on other bills.