Clinton puts student loans high on election agenda

US presidential aspirant Hillary Clinton this week unveiled her US$350 billion plan to make college more affordable, joining other Democratic contenders who have made student debt relief a central part of their platform.

Clinton, who touted the plan on the campaign trail in New Hampshire, stops short of calling for debt-free solutions, as Vermont Senator Bernie Sanders, a rival, does. Her plan, dubbed New College Compact, would provide incentives to public universities that guarantee students won’t need to take out loans for tuition. That would also allow low-income students to put federal grant aid toward living expenses.

Clinton's plan also would tackle other issues that have brought the collective US student debt levels to more than US$1.2 trillion. She would pay for it by limiting certain tax deductions for high-income taxpayers.

While the position aims to attract young voters, Clinton also called her higher education proposals a centrepiece of her economic agenda, likening it in importance to health care in the 2008 elections. About seven in 10 college students in 2013 graduated with debt averaging US$28,400, federal data show, making it harder for them to start businesses or buy homes.

“College is supposed to help people achieve their dreams, but more and more paying for college actually pushes those dreams further and further out of reach,” Clinton said. "That is a betrayal of everything college is supposed to represent."

Clinton's plan would cost US$350 billion over 10 years, with about half in grants going to states that guarantee students won't need loans for tuition at public four-year universities. Students would be required to contribute earnings from a 10-hour-a-week job, and expected family contributions would be lower than they are under the current federal formula. Clinton also adopted President Barack Obama's proposal to make community college free.

Anticipation of the Clinton plan, released as teachers and students turn their attention to back-to-college season, has been building for months, pushed into the spotlight by advocacy and policy groups seeking to reverse low voter turnout in the 2014 congressional elections.

"One of the things we realised was [that there was] a lack of enthusiasm on the polls," said Kayla Wingbermuehle, debt-free college campaign director for the Progressive Change Campaign Committee. "No one woke up on election day thinking, 'If I don't go vote today, my kids won't have a chance to attend college'."

In a national poll of 1,500 likely 2016 voters, including Democrats, Republicans and Independents, 71% said they would support a plan for debt-free college. Even more, among Democrats who said they did go to the polls in 2014, 49% said they "definitely would vote" in 2016 if a debt-free college plan were being proposed. The poll was conducted by the committee's sister organisation, the Progressive Change Institute.

Republican contenders have so far been relatively quiet on the issue. Last week, former Florida Governor Jeb Bush called Clinton's proposal "fiscally irresponsible." New Jersey Governor Chris Christie in June dismissed the notion of debt-free college as a "typical liberal approach”, suggesting alternative measures, including income-share agreements, in which students would pay for college with a percentage of future earnings.

Meanwhile, Clinton last week took a jab at Wisconsin Governor Scott Walker, who last month signed into law a budget that slashes US$250 million from the University of Wisconsin system. And the topic of education barely registered in the first Republican debates earlier this month.

Mark Huelsman, senior policy analyst at Demos, a think tank that is working with the committee on the debt-free campaign, said Republicans will at some point have to respond.

"Student debt and how to pay for college has become one of the big two or three kitchen-table economic issues, and that turns it into a central [focus] of the presidential candidates," Huelsman said. "Every major Democratic candidate for president has put forth a really bold, big solution to the problem. That's pretty striking."

Refinance loans

Martin O'Malley, the ex-governor of Maryland, in July rolled out his plan to make college debt-free for Americans, aligning it with the GI Bill, historic federal legislation that opened the doors of higher education and the middle class to veterans of World War II.

O'Malley's plan would allow families to refinance college loans – an option available to homeowners and businesses – and tie public tuition rates to median family incomes. O'Malley also raised eyebrows when he mentioned that his family had accumulated nearly US$340,000 in student loan debt for his two daughters.

Senator Bernie Sanders was the first to put forth a plan, and his is the most radical of the three: In May, he introduced the legislation to make four-year public colleges and universities free. It would be paid for through a US$70 billion plan that would impose a tax on Wall Street transactions by investment houses, hedge funds and other speculators.

In doing so, he reminded voters that the United States has been losing ground in international education measures.

"We once led the world in the percentage of our people with a college degree, now we are in 12th place,” Sanders said. “Countries like Germany, Denmark, Sweden and many more are providing free or inexpensive higher education for their young people. They understand how important it is to be investing in their youth. We should be doing the same."