WASHINGTON
— Calling for a "new college compact," Hillary Rodham Clinton on
Monday will unveil a $350 billion plan aimed at making college more
affordable and reducing the crushing burden of student debt.
At
a town hall meeting in New Hampshire, the state with the highest
average student debt in the country, Clinton will propose steps to
reduce the cost of four-year public schools, make two-year community
colleges tuition-free and cut student loan interest rates, according to campaign aides.
The
college affordability plan, a main plank of her policy platform, is an
effort to address a major financial stress for many American families
and satisfy a central demand of the Democratic party's liberal wing.
The
proposal centers on a $200 billion federal incentive system aimed at
encouraging states to expand their investments in higher education and
cut student costs. States that guarantee "no-loan" tuition at four-year
public schools and free tuition at community colleges would be eligible
to receive federal funds.
But
Clinton doesn't go quite as far as some more liberal politicians and
party activists, who've made "debt- free college" an early litmus test
for the presidential primary field. In May, Vermont Sen. Bernie Sanders
released his own plan that would eliminate tuition and fees for public
universities. The $70 billion annual proposal would be funded by
imposing a tax on transactions by hedge funds, investment houses and
other Wall Street firms.
While
military veterans, lower-income students and those who complete a
national service program, like AmeriCorps, would go to school for free
in the Clinton plan, others would incur costs for their schooling and
living expenses at four-year public universities. "For many students, it
would translate into debt-free tuition," said Carmel Martin, executive
vice president for policy at the Center for American Progress, who
advised Clinton on the plan. "It will depend on the student
circumstances and the institution they are going to."
For
most students, their families will still be expected to make a
"realistic" contribution, say Clinton's aides, and students will
contribute wages from 10 hours of work per week.
Those
currently repaying loans would be able to refinance their outstanding
debt at lower rates, a change Clinton's aides say will save an average
of $2,000 for 25 million borrowers over the life of the loan — an amount
that's equal to just about $17 month over a 10-year repayment period.
She would also expand income-based repayment programs, allowing every
student borrower to enroll in a plan that would cap their payments at 10
percent of their income with remaining debt forgiven after 20 years.
Private
universities with "modest endowments" that serve a higher percentage of
low-income students, including historically black colleges, would also
receive federal funds to help lower the costs of attendance and improve
graduation rates.
The
cost of Clinton's plan would be offset by capping itemized tax
deductions for wealthy families at 28 percent, like those taken by
high-income taxpayers for charitable contributions and mortgage
interest. That proposal, which has long been included in President
Barack Obama's annual budget, would raise more than $600 billion in the
next decade, according to the Treasury Department.
Clinton's
plan would likely face a steep climb in Congress: A $60 billion Obama
administration initiative for free community college has gotten little
traction.
Even
so, college affordability has emerged as a major issue on the
presidential campaign trail, as families face the highest debt burden in
generations. National student debt is near $1.3 trillion and the
average price for in-state students at public four-year universities is
42 percent higher than it was a decade ago, according to the College
Board.
In
almost every campaign stop, Clinton hears from students and families
worried about paying for school. Her team conducted weeks of meetings
with experts on the issue to develop the proposal, including policy
staffers for liberal leader Sen. Elizabeth Warren, D-Mass.
"There's
something wrong when students and their families have to go deeply into
debt to be able to get the education and skills they need in order to
make the best of their own lives," she told students and teachers at
Kirkland Community College in Monticello, Iowa, in April, shortly after
announcing her campaign.
Clinton
aides believe their plan will help build enthusiasm for her candidacy
with younger voters — whose support twice helped catapult Obama into the
White House. The policy rollout is timed for when students return to
college campuses. Clinton organizers plan to promote the plan at
registration events and other gatherings kicking off the school year,
according to a campaign aide, in an effort to galvanize college
students.
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