Sen. Schatz Leads Legislation to End Student Debt Crisis
The legislation will reverse the growing student debt crisis in the U.S. and restore a path to affordable college by providing states incentives through matching grants to increase investments in public higher education and provide students with debt-free college.
If signed into law, the Debt-Free College Act would establish a state-federal partnership that provides a dollar-for-dollar federal match to state higher education appropriations in exchange for a commitment to help students pay for the full cost of attendance without having to take on debt.
“After the recession, states cut their investment in public education while college costs continued to rise,” Sen. Schatz said. “We’re at a point now where the full cost of college is more than twice as much as tuition, which is why solutions to the student debt crisis need to focus on the full cost to students and their families. My bill brings states back to the table and leverages federal dollars to reinvest in public education and help the people who need it most.”
Beyond tuition and fees, the total cost of attendance—room and board, books and supplies, and other expenses—has forced 44 million Americans to take on debt to cover their financial need. College debt has increased 170% since 2006 and now exceeds $1.4 trillion, which is second only to mortgage debt and surpasses even credit card debt.
According to the Federal Reserve Bank of New York, student loan debt is responsible for 35% of the decline in homeownership since 2007. The percentage of younger people who reported owning a business was cut in half between 2010 and 2013. Pew Research Center found that about 50% of student borrowers say their loans increase their risk of defaulting on other bills.
“Higher education is one of the central pathways to economic opportunity and success,” said Sen. Booker. “However, for too many of our lower income students, the high cost of college and unmet need prevent them from matriculating and completing their degrees. Our bill provides our lowest-income students with the opportunity to attend state colleges and universities debt-free. This legislation is a much-needed revitalization of our federal and state investments in higher education and takes important steps to control tuition costs.”
“College has become a dream that is weighed down with a giant price tag that an individual could only imagine taking on,” said Sen. Harris. “Those who take that challenge face mountains of debt and are trapped in a devastating cycle of loans that will follow them for decades. We must take action and address this crisis before it’s too late, and this bill puts us on a path to doing so.”
“I was the first in my family to go to college, so I know firsthand how important the opportunity to pursue higher education is to the American Dream,” said Sen. Merkley. “But right now, crushing debt is putting that dream in jeopardy for far too many American students. In the wealthiest nation on Earth, our students shouldn’t have to mortgage their future just to get a college degree. It’s time to put the ‘public’ back in public education and ensure that every student who wants to can pursue higher education debt-free.”
“Every state in the country should offer debt-free college pathways for all students,” said Sen. Warren. “That’s why I’m glad to support the Debt-Free College Act, which leverages federal resources to give states an incentive to increase their investments in public higher education, bring down prices, and make sure students have a chance of making it through college without getting crushed by debt.”
“Too many Ohio graduates are trapped in a seemingly endless cycle of student loan debt and are held back from pursuing financial opportunities like buying a house or saving for retirement,” said Sen. Brown. “By working with states and schools to ensure students can graduate debt free, we can make college truly affordable for our young people and their families.”
“At a time when higher education remains out of reach for far too many, this legislation would make college affordable for working families, reduce student debt and breathe new life into the American Dream,” said Sen. Blumenthal.
“College costs and student loan debt are holding back an entire generation and creating a drag on economic growth for our country,” said Sen. Baldwin. “We must embrace solutions like the Debt-Free College Act to help America’s students and ensure that higher education is a path to prosperity, not a path into suffocating debt.”
“Unfortunately, for too many students these days, the payoff of a college education isn’t being realized,” said Sen. Durbin. “They find themselves in default with their credit scores ruined and debt that follows them to the grave. This trend has got to stop. I’m proud to introduce the Debt-Free College Act with Senator Schatz today, which is just one piece of legislation designed to enable students to attend public college debt-free and complete an important stepping stone for many on the path to the American Dream.”
“It’s time to finally ensure all students can pursue their degree, regardless of their income or family background,” said Rep. Ellison. “I will do everything in my power to fight for this bill until we live in a nation where no student has to choose between enriching their mind and shouldering tens of thousands of dollars in debt.”
“A college education is essential for entering the middle class. However, more students than ever are graduating with crushing levels of debt, making it extremely difficult to get ahead. With the cost of college skyrocketing over the last 30 years, many Americans can no longer afford the tuition and fees, room and board, books and supplies, and other expenses that a college education demands,” said Rep. Pocan. “We must end the reliance on debt as a way to finance a college education and the Debt-Free College Act is a strong step forward in making this a reality. It’s time for us to rethink our approach to paying for college.”
The bill is co-sponsored by U.S. Sens. Kirsten Gillibrand (D-N.Y.), Cory Booker (D-N.J.), Kamala Harris (D-Calif.), Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.), Tammy Baldwin (D-Wis.), and Dick Durbin (D-Ill.) and by U.S. Representatives Judy Chu (D-Calif.), Yvette Clarke (D-N.Y.), Joe Crowley (D-N.Y.), Rosa DeLauro (D-Conn.), Mark DeSaulnier (D-Calif.), Keith Ellison (D-Minn.), Jimmy Gomez (D-Calif.), Raul Grijalva (D-Ariz.), Eleanor Holmes Norton (D-District of Columbia), Jared Huffman (D-Calif.), Sheila Jackson Lee (D-Texas), Ro Khanna (D-Calif.), Barbara Lee (D-Calif.), Carolyn Maloney (D-N.Y.), Gwen Moore (D-Wis), Grace Napolitano (D-Calif.), Rick Nolan (D-Minn.), Frank Pallone (D-N.J.), Mark Pocan (D-Wis.), Jamie Raskin (D-Md.), Mark Takano (D-Calif.), Bonnie Watson Coleman (D-N.J.), and Peter Welch (D-Vt.).
“I wholeheartedly support Sen. Schatz’s ambitious new Debt-Free College Act to reverse the growing student debt crisis in America,” said California State Treasurer John Chiang. “We must break the back of college unaffordability in this country by taming out of control tuition increases and student debt. If we fail, California will not only fall 1.1 million college graduates short of our labor force needs, but we will be robbing our children of real opportunities to save for a home, start a business, and have a dignified retirement. Sen. Schatz’s legislation provides a well-designed pathway forward to a more prosperous American future.”
“This proposal is truly a comprehensive approach that ensures all students—especially students of color—in our country can get a degree without putting their financial futures at risk,” said Tamara Draut, vice president of policy and research at Demos. “If signed into law, millions of students would have access to a college education who otherwise were left on the sideline because it was out of their price range.”
“At a time when America’s higher education policy is woefully in need of an update, this is a bill that directly responds to the problems facing today’s students,” said Reid Setzer, Government Affairs director for Young Invincibles. “The Debt-Free College Act takes on the financial challenges facing students by creating the debt-free pathways they need to access and complete postsecondary education. Tuition alone is only a partial share of the cost of college. In addition to free tuition and fees, this bill would give students at two-year and four-year public colleges financial aid to cover books, transportation, housing, and other costs that can make it impossible to obtain a college education, while prioritizing students with the highest need. It does this by creating a partnership between the federal government and state governments designed to provide tuition-free and debt-free college to as many students as possible, directly targeting the underlying cause of ballooning debt: state disinvestment. This is the kind of modern policy that responds to the lives of students holistically and makes college attainable for millions.”
The bill is also endorsed by National Education Association (NEA), American Federation of Teachers (AFT), Demos, Center for Law and Social Policy (CLASP), Young Invincibles, Credo Action, Institute for Higher Education Policy (IHEP), Council for Opportunity in Education (COE), National Association for the Advancement of Colored People (NAACP), League of United Latin American Citizens (LULAC), UnidosUS, and California State Treasurer John Chiang.