For some students, college debt can be a disincentive to attend or a crushing burden afterward. For others, many of whom are starting classes now, it is a reasonable investment in a degree that will lead to increased lifetime earnings. As they look for crowd-pleasing solutions to the college debt “crisis,” the Democratic candidates aren’t making the right distinctions.
Sen. Bernie Sanders, I-Vermont, for example, would make public higher education free, an expensive proposition that would subsidize a lot of rich people. Former secretary of state Hillary Clinton’s plan is smarter but also imperfectly targeted.
Ms. Clinton starts by taking on President Barack Obama’s idea of offering everyone free community college, regardless of financial need, when such generosity simply isn’t necessary to bring education within everyone’s reach. Then she would slash the interest rate on new federally subsidized student loans, which are taken by students before they’ve chosen a career and started earning money, even though some of that help would certainly go to future millionaires. She would also allow all Americans with student debt to refinance their loans at a lower rate.
The marquee proposal in Ms. Clinton’s plan is to pour money into public colleges on the condition that they ask no student or family to make any more than an “affordable and realistic family contribution” toward tuition. It would keep college affordable enough that no one would have to take out loans. Is that worth the expense – about $175 billion over 10 years just for the public college portion? More-targeted policies could channel aid to needy student debtors and fight cost inflation. In fact, such policies are part of Ms. Clinton’s plan, too. One would more closely tie post-college debt payments to incomes, so corporate lawyers would repay more than teachers.
These more-targeted proposals seem relatively modest, but they are fair, they could help people who really need it and they would leave precious tax dollars available for other urgent needs.
This excerpt is from The Washington Post.