“Every kid needs a debt-free option — a strong public university where it’s possible to get a great education without taking on loads of debt,” said Warren. Drawing a line between personal success and a thriving economy, she added, “It’s time to open the doors of opportunity wider and to invest in our future.”
Colleges, Warren said, must have more “skin in the game.” Currently, when students default on their loans, it is taxpayers who make up the difference, not colleges. Warren suggests:
- Making colleges more accountable for cutting costs and boosting graduation rates—provided the accountability measures are responsible and effective, rather than arbitrary and punitive;
- Ensuring that colleges spend financial aid dollars on educating students, rather than on high administrative salaries and elaborate marketing; &
- Incentivizing colleges to cut costs with shared savings programs that would help students graduate in less time — four years instead of six — and save money on Pell Grants and other financial aid.
Click here for our previous report on the growing student debt crisis.
Sen. Warren slammed states for cutting funds to higher education, noting that in Arizona, spending per student is down by almost 50 percent, while tuition at four-year public colleges has risen by 80 percent. She called for:
- A halt to state cuts in higher education – “This is simple math,” she said. “As states cut back their support, tuition goes up and families have to pick up the bill.”
- Refinancing student loans – Warren said that student loan rates are typically higher than the borrowing costs to the states, so states could afford to provide refinancing for both public and private student loans. North Dakota is a good example: The state recently refinanced more than $125 million in loans, for 3,000 borrowers.
The federal government must step up as well, said Warren. In particular, “the federal government should not profit from student loans — period,” she said. “The debate over the right interest rates should be between whether the program should break even or be subsidized — not over how big the profits should be.”
Sen. Warren also recommended that the federal government:
- Leverage federal dollars to support state incentives that would increase public funding of higher education.
- Fix the Pell program so that more grant money is available year-round, and so that the funding is mandatory, rather than subject to budget fights each year.
- Simplify the application process for federal aid—a process that keeps many students from applying for financial aid, and from attending college at all.
- Enforce existing laws protecting students from unreasonable debt, and provide transparency in the Department of Education. “Show that there is a real cop on the beat,” she said, rather than a government that protects schools when they violate financial aid regulations.
“The time has come to be bold,” said AFT President Randi Weingarten. “Sen. Warren’s proposals share wide bipartisan support in Congress. The question remains: Does Congress have the political will to find common ground and change the landscape for the future of higher education in our country?”
for Weingarten’s full public statement on Sen. Warren’s proposals.
The upcoming reauthorization of the Higher Education Act (HEA), the law that governs federal student aid, could be just the opportunity for our elected officials to move in the right direction. With tuition continuing to climb, and a growing number of graduates struggling to secure jobs and repay their student-loan debt, lawmakers should look for new ways to expand access to a quality higher education.
for AFT’s principles on promoting student access and success.