Hillary Clinton will not fix student debt

Last Monday, during a campaign stop in New Hampshire, Hillary Clinton announced a plan to address the high cost of college and the eye-popping $1.2 trillion in outstanding loans that students still owe to lenders and to the Department of Education. Indeed, a solution to this national travesty is long overdue. Almost three quarters of students graduate with an average debt load of $35,000. Of 40 million student debtors, 8 million are already in default. In another sign of crisis, more than 40 percent of all borrowers are not yet in repayment, according to the New York Federal Reserve. This suggests that an even bigger wave of defaults may be on the way.

We need look no further than the predatory for-profit college sector to see what happens when millions of students take on debt to gain credentials for jobs that often don’t exist or don’t pay wages that would allow them to repay their loans. Default rates are highest at for-profit institutions that aggressively target low-income people and students of color. These institutions promise students education that leads to good jobs, yet often fail to live up to their claims, all while enriching shareholders and executives with billions from the federal student loan program and paying off lobbyists and politicians to keep the racket going. Meanwhile, the students themselves have virtually no recourse to dispute their loans or get out from under crushing payments that could last for decades.

Clinton’s plan addresses none of the problems that students and families are actually facing, no matter which type of college they attended. She proposes to provide grants to states that would commit to increasing funding for higher education and can guarantee that students would not have to take out loans to attend college. For people already in debt, Clinton would call on Congress to allow them to refinance their student loans at a lower rate.

The $350 billion program, to be paid for, according to the Clinton campaign, “by limiting certain tax expenditures for high-income taxpayers,” was hailed by the Washington Post’s Wonkblog as “a comprehensive agenda that encompasses just about evertything on the (Democratic) party's wishlist.” But the truth is that it represents yet another sad attempt by a politician to pretend to care. The proposal repeats a tired formula favored by both major parties: Make a few tweaks to the current failed system and then rebrand it under a different name and sell it as new thinking. For example, Clinton’s plan is based on assuring that “no student” should borrow for college. That sounds good. But what does it mean? It does not mean that Clinton supports ending tuition at all public 2- and 4- year colleges. Instead, Clinton’s plan would require students to pay out of pocket for education. The only difference is that politicians and policy makers will stop calling it “debt.”

We can see evidence of this rebranding strategy in so-called “debt-free” plans that policy makers have already put forward as solutions. They go by names like “Pay It Forward,” “income-sharing agreements,” “income-based repayment,” or “Pay As You Earn.” All of these programs require that students pay a portion of their earnings after college. Instead of billing students upfront and calling it debt, lenders and the Department of Education will garnish graduates’ wages and call it “affordability.” Clinton’s plan aims to have graduates contribute no more than 10 percent of their annual earnings toward covering the cost of college, a repayment program that imposes a greater overall burden on those who earn the least. Furthermore, parents of wealthy students may choose to pay tuition costs up front, allowing their children to avoid the income deduction entirely. 

We should be appalled that politicians expect us to fall for this faux solution. A truly affordable solution to the student debt crisis would make public college free for all. Research shows that after stripping off the amount that the government already spends to subsidize higher education — including at predatory for-profit institutions — the total amount of new money necessary would be as little as $15 billion a year. This represents a fraction of one percent of yearly government spending, less than we spend on tax breaks for just 20 corporations.

But of course, you'll never hear Clinton or most of the other contenders endorse a free or low-cost college system like the kind that already exists in countries such as Germany, France and Sweden. In the bizarre, billionaire-funded circus that we call a party nomination process, to endorse something as rational as free college would risk a candidate’s claim to providing realistic solutions, a price that most are not willing to pay.

Clinton’s plan is also evidence of the patronizing approach taken by the moneyed class towards student debt. Some of the so-called “debt-free” plans will only be available to those who agree to enroll in occupational training programs in technology fields. No one patronizes students from wealthy families by telling them to live their lives only to please employers and policymakers. No one tells them to forgo the liberal arts for vocational training. Only middle-class and low-income students have to bend their wills and their dreams to fit someone else's idea of what they should study and learn.

To tackle student debt and the high cost of college, we need to do even more than make college truly free. We also need to rethink the purpose of education. Most of the time, students are told that college is a key to finding employment and the only path out of poverty. In reality, our country’s economic problems can’t be solved by education alone. Students from working families don't want to pay their loans differently. They want and deserve education organized in their interest, not in the interest of lenders or employers.

As students learn more about what “debt free” really means, politicians will discover that they can’t stem the anger and frustration of debtors and families by renaming the problem. If it gives us a chance to have a real conversation about quality education, then this election season may be a welcome event after all.