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Sen. Brian Schatz (D-HI) reintroduced his Debt Free College Act on Wednesday with Rep. Mark Pocan (D-WI). Now that Democrats control the House of Representatives, Schatz believes there’s greater momentum behind it than there was during its introduction last year, when Republicans held both chambers.
A year ago, Schatz told me he was tired of just hearing about making college more affordable. He wanted to get it done.
“I don’t want to go back to every college campus eight years after my first election and say the same stuff,” he said during our interview. “Whether I can stomach, morally, just talking about college affordability for eight years, or 14 years, or 20 years ... shame on all of us for running on this without fixing it.”
Now the senator from Hawaii is feeling slightly more optimistic. Democrats took back the House in 2018, and the House and Senate will soon kick off the process of reauthorizing the Higher Education Act, and chair of the Senate Committee on Health, Education, Labor, and Pensions Lamar Alexander (R-TN) has an incentive to get this massive bill done soon — he’s retiring in 2020.
“It is the most progressive policy, it’s also implementable,” Schatz said. “It’s too early to know how receptive Chair Alexander is going to be to all of this, but if he wants a bill, he’s going to have to deal with the Democratic House, and he may have to make some compromises.”
Schatz wants his bill to be considered as part of the Higher Education Act reauthorization
There is plenty that Republicans like Alexander won’t like about the Schatz bill, which is essentially Hillary Clinton’s and Bernie Sanders’s 2016 college affordability plans on steroids, aiming for debt-free rather than tuition-free college (as Sanders offered). It also expands the no-debt promise from just tuition (as was in Clinton’s plan) to include living expenses as well.
This is because the cost of going to college is so much more than tuition. As Schatz estimates, the average annual cost of tuition at state schools is about $8,900. But the total annual cost of college including tuition, housing, food, and books is closer to $20,000. Accumulating thousands of dollars in debt to pay for these other expenses can be devastating for lower-income students.
“Covering tuition for everybody is not a bad idea — it’s just that tuition is only 45 percent of the cost of college,” Schatz told me last year. “And I also believe that we ought to cover the full cost of college for people who can’t afford it before we cover tuition for people who can.”
Under Schatz’s plan, participating states would get a dollar-for-dollar match from the federal government for however much funding they appropriate for state schools. In exchange, those schools would have to commit to helping students pay for the full cost of college without taking on debt, through need-based grants to help students who can’t afford it cover costs.
Whether the plan would work would ultimately depend in part on states’ willingness to make that commitment — and as the attempt to expand Medicaid under Obamacare has shown, even a great financial deal for states won’t necessarily get them to go along.
The bill also comes with a hefty price tag: $80.1 billion for the first year of federal-state partnership and $95.4 billion to meet the goal of debt-free college for all students.
Debt-free college plans like Schatz’s take the full cost of college into account, including living expenses, meal plans, and books. In these plans, help is often given through need-based grants to low-income students and families, while those who can afford the extra costs will still have to pay them.
The plan has more co-sponsors than it did last year; nine Senate Democrats and 33 House Democrats are co-sponsoring, but as of yet, there is no commitment from House Speaker Nancy Pelosi or Senate Majority Leader Mitch McConnell to bring it up in committee in either chamber. One Democratic aide told Vox that House Democrats are committed to doing reauthorization in a bipartisan way, which could be problematic for Schatz’s progressive vision.
Still, progressives want to see this idea get airtime. “We’ve notified [Pelosi], we told her this is one of our priority pieces of legislation. It’s one of the first three we’ve highlighted for her,” Pocan said. “Our job now is to build coalition support, get additional sponsors, and really get the idea out there.”
Pocan and Schatz may be aided in their quest by Democrats running for president in 2020, who include Sanders and many other progressive figures who are likely to make debt-free college a main plank of their platform.
The problem Schatz is trying to fix: states aren’t spending as much on higher education as they used to
The problem of rising student debt at public colleges can be traced back to the early and mid-2000s. States picking up less of the cost of providing education at their public schools is a trend that started before the Great Recession, but it was dramatically exacerbated by the 2008 economic crisis.
In the wake of the recession, states tightened their budgets and cut money for public colleges. But even as the economy has improved since 2008, the picture of costs and student debt is still grim.
To give you a sense of where things stand, in the 2017 school year, overall state funding for public two- and four-year colleges was nearly $9 billion below the 2008 level (after adjusting for inflation), according to the Center on Budget and Policy Priorities, a left-leaning think tank.
As Vox’s Libby Nelson wrote in 2016:
At public research universities, students pay 56 percent of the cost of their education, up from 25 percent in the 1980s.
The result: Tuition and fees for in-state students have increased by nearly 30 percent since 2007, from $7,080 to $9,140, according to the College Board. The price the average family actually pays for tuition and fees after financial aid hasn’t risen as sharply, but it’s gone up too, from $2,680 to $3,030.
There are staggering statistics about America’s collective student debt: It hit $1.5 trillion last year and has surpassed auto loan and credit card debt, now second only to US mortgage debt.
Still, the issue of debt and defaulting on loans is much more of a crisis for low-income students, particularly students of color. A 2018 Brookings Institution report found that student debt and loan default among black college students was far worse than among their white counterparts. Black graduates with a bachelor of arts degree default at five times the rate of whites with the same degree, 21 percent compared to 4 percent.
Something that is often forgotten in discussions of student loan debt is that low-income students and students of color — especially those who default on their loans — experience more severe impacts of debt than middle-class students who are still able to pay off their loans, said Tiffany Jones, director of higher education policy at the nonprofit Education Trust.
“This is why the cost-of-living piece is so critical and tuition is not enough,” she told me last year. “If anything, we don’t want folks disengaging on higher education. This still is the key to social mobility.”
Schatz estimates that if his plan were enacted and if all states joined, after one year, 10 states would be able to go debt-free for public university students, 22 states could provide debt-free college for their Pell Grant recipients and a portion of non-Pell students, and 18 states could make debt-free college a reality for many Pell recipients.
Schatz knows both Democrats and Republicans recognize this as a problem, but he’s frustrated with the lack of action. He recalled a 2018 Senate Banking Committee hearing with Trump’s Republican chair of the Federal Reserve, Jerome Powell, in which Powell acknowledged the severity of America’s student loan debt problem.
“He agreed with me that it was a national economic problem, both on the debt side but also what it does as a disincentive toward getting a higher education,” Schatz said.
The rise and fall of affordable college as a political issue
The issue of affordable college became a progressive rallying cry in 2016; Sanders’s success on the issue with college students in the Democratic primaries was one of the reasons Clinton introduced a tuition-free affordable college plan in the general election. The issue also came up, albeit less frequently, at Trump campaign rallies in 2016.
After Trump was elected, the federal government has largely been silent on the issue. Under Education Secretary Betsy DeVos, President Trump’s higher education policy actions have been relegated to quietly rolling back Obama-era regulation preventing predatory student lending practices.
The issue is ripe to return to the spotlight in 2020, when Sanders is again a leading presidential contender.
“One of the reasons I feel so strongly about this is that I think both parties have been running on this and we haven’t done the hard legislative work,” Schatz told me a year ago. “And on a personal level, I prioritized this in my 2014 campaign, and I told my staff, ‘I don’t want to be coming back in 2022 running on college affordability again.’ Because then it’s just a device for getting votes.”
Solving the student loan crisis has historically been a bipartisan issue; for instance, Sen. Marco Rubio (R-FL) has talked a lot about how he was personally affected by his student loans and introduced legislation with Sen. Mark Warner (D-VA) to cap student loan payments and streamline the repayment process.
But overall, Schatz sees little appetite from his Republican colleagues to reform the system. And with the GOP hastily passing tax cuts estimated to add $1 trillion to the national deficit over the next decade, Schatz told me last year he’s not yet going to wade into details of how he’ll pay for his plan because he thinks there’s a double standard with Republicans and Democrats.
“I don’t play the pay-for game. I reject the pay-for game,” he said. “After the Republicans did the $1.5 trillion in unpaid-for tax cuts, and as we’re doing a bipartisan appropriations bill — which I support — which is also an increase in federal spending [that’s] unpaid for ... I just reject the idea that only progressive ideas have to be paid for. We can work on that as we go through the process, but I think it’s a trap.”
The glimmer of hope Schatz has is the House Democratic majority, and the 2020 election.
“[I’m] more optimistic than I was a couple months ago, actually,” he said. “There’s really good momentum in the House for this, we’ve got a number of presidential candidates who like the idea, and it appears both chambers are serious about doing a higher education reauthorization. That’s our opportunity to do something meaningful.”
