If you, like 40 million other Americans, have a student loan, chances are you’re carefully weighing which of the remaining presidential candidates has the best solution. This election, the issue is every bit as prominent as women’s reproductive rights, gun violence, LGBT equality, and climate change: In 2014, 69 percent of senior-year students graduated from public and nonprofit colleges reporting student loan debt, each with an average of $28,950 owed.
This crisis is likely to be the biggest defining economic factor of your life right now—and the lives of other millennials—but the issue also echoes across multiple generations: “Student loan debt is an important issue not just to millennials and recent college graduates but older borrowers still paying down their own graduate school debt or loans taken out to help their children go to college,” said Credible.com founder and CEO (and former investment banker) Stephen Dash. “Those running for office ignore the issue at their own peril,” he warned.
Keep scrolling for a complete guide to where the election front-runners stand when it comes to your student loan debt.
“No family and no student should have to borrow to pay tuition at a public college or university.… And everyone who has student debt should be able to finance it at lower rates.”
What you need to know:
- She’s consistently proposed possible solutions to the issue of student loan debt. In 2006 and again in 2007 she introduced the Student Borrower Bill of Rights Act, which (if it had been successful!) would have imposed limits on repayment plans to reflect income, required colleges to be more transparent about graduates’ employment and income information, permitted loans to be discharged in bankruptcy, and would have made it easier for student borrowers to consolidate their loans.
- Clinton’s current plan is called the New College Compact, which proposes “debt-free” access to college.
- The aim of the plan is to make sure students never need to borrow money for tuition or books while attending a four-year degree in their state.
- She wants anyone with existing student loan debt to be able to refinance at current rates available to students taking out new loans.
- Clinton plans to reduce interest rates on new student loans.
- She wants to make it easier for borrowers to enroll in repayment programs tailored to their income level, with monthly cap payments at no more than their discretionary income.
What this means:
Her campaign estimates that over a 10-year period, New College Compact would cost the federal government $350 billion, which she proposes will be fully paid for by limiting “certain tax expenditures” for high-income taxpayers. If successful, it would make obtaining a four-year degree at a college in your state debt-free (including tuition, books, and fees) and lighten the burden on people struggling with debt from old student loans by cutting interest rates and expanding existing aid programs. According to Clinton’s campaign website, this would impact about 25 million borrowers, with each saving about $2,000 in total on average. If you’re a low-income student, under this plan you will also be able to use federal grants to help with living expenses. Students at community colleges will be able to access free tuition. Students will also have to contribute their earnings from working 10 hours a week.
There is some speculation as to whether New College Compact would receive Republican support, as in the past refinancing policies for student loan borrowers have been blocked. “A government student loan refinancing program would be costly and require new taxes to pay for it, and Republicans have blocked legislation that would create such a program,” Dash said. “It’s important to note that qualified borrowers already have the ability to refinance student loan debt at lower interest rates with private lenders,” he added.
“We must fundamentally restructure our student loan program. It makes no sense that students and their parents are forced to pay interest rates for higher education loans that are much higher than they pay for car loans or housing mortgages. We must also end the practice of the government making $127 billion over the next decade in profits from student loans.”
What you need to know:
- Sanders plans to make tuition free at public colleges and universities.
- He wants the federal government to stop profiting on student loans.
- Will cut student loan interest rates substantially.
- Will allow Americans with student debt to refinance student loans at the current (lower) interest rates.
- Under Sanders’ plan, students will have access to a need-based financial aid and to work and study programs that will help them leave college without debt.
- His plan would require public colleges and universities to meet 100 percent of the financial needs of the lowest-income students, and these students would have access to federal, state, and college financial aid for their living expenses, rent, and books.
- He also plans to triple the federal work study program to help students get career experience.
- His campaign estimates this plan will cost $75 billion per year, with federal government responsible for two-thirds of the bill and states footing the rest. He’s proposed imposing a tax on Wall Street, charging a small levy on every stock, bond or derivative sold to fund the plan. A similar strategy has been used in Britain, Germany, France, Switzerland, and China.
What it means:
Basically, tuition will be free at public colleges and universities, following the lead of educators in Scandinavian countries like Sweden and Norway. Sanders’ plan will take loan rates back to 2006 levels of 2.37 percent, and allow anyone with old student debt to refinance at the same rate.
However, while free tuition might sound like a bigger, better scheme than Clinton’s “debt-free” plan, Sanders is already copping heat on both sides of the aisle for both his plan and his plan for funding it by taxing Wall Street. “While free tuition would go a long way in helping cut the costs of college, there are real concerns here about how this plan would be funded—not to mention, how receptive conservatives would be to implementing it,” Andy Josuweit, CEO of Student Loan Hero told us. Clinton will likely have an easier time getting support from conservatives for New College Compact, than Sanders, whose plan seems, in a word, ambitious—after all, the gatekeepers to policy reform sit in the state house or the House of Representatives, not the White House.
“You could cut that [The Department of Education] way, way, way down.”
- Trump has not proposed a comprehensive plan to address the student loan crisis.
- Like Sanders, he believes the federal government shouldn’t profit from federal student loans.
- Trump has a poor track record with higher education. His unaccredited, for-profit university (Trump University) is currently the subject of a pending class-action suit.
What it means:
“Trump has sounded sympathetic to the plight of student loan borrowers, but hasn’t put forward a detailed higher education plan,” Dash explained. In an interview last year he did say that he believed the federal government shouldn’t profit from student loans, echoing Sanders’ opinion, but he hasn’t made any real steps to show he has a solid, well-funded solution to the current student debt crisis.
“[I] took over $100,000 in school loans, loans I suspect a lot of y’all can relate to, loans that I’ll point out I just paid off a few years ago.”
What you need to know:
- Has not suggested a plan to address student loan debt and has remained quiet on the issue.
- He voted in favor of the Bipartisan Student Loan Certainty Act of 2013 to ensure federal loans would not have fixed rates moving forward, simultaneously tethering student loan interest rates to the markets and placing a cap on the interest rate.
- Cruz plan to abolish the U.S. Department of Education and transfer more power to states.
- In 2014 he voted to block a bill that would have allowed Americans to refinance their student loans at lower interest rates.
What that means:
While Cruz hasn’t put forward a detailed plan to address the student loan crisis, he has mentioned his own struggle with student loan debt during the election campaign. It’s hard to say what Cruz would (or wouldn’t) do to about student loans if he won the election, but the fact he voted against the 2014 refinancing bill and has failed to campaign with a proposed plan doesn’t give anyone much reason to think he would push for legislation that eases the burden of student loan debt as president.
“People need to get trained to do this work while they’re still in high school so they can graduate and go to work.”
What you need to know:
- Gov. John Kasich is the only remaining Republican candidate who’s spoken at length about the student debt crisis.
- As governor, Kasich proposed a $120 million college debt relief fund to help borrowers repay loans and help local graduates who stay in Ohio after school to find work in certain industries.
- His education policy centers around keeping college costs down by helping high school students earn college credits.
Although Kasich has been more vocal on the issue of student debt than the other remaining Republican candidates, there’s a wide chasm between his high-level solutions and the detailed plans offered by both Clinton and Sanders, so we can’t be sure what position he would take as president. Kasich said he would consider replicating Ohio’s education policies nationally if he were to become president. That would include a system that encourages high school students to earn college credits before they graduate high school in an effort to keep college costs down. In Ohio college tuition and fees will also be frozen for the next two years while state government bodies help the schools to find new ways to cut costs. Colleges and universities in the state are also paid based on the number of students who successfully graduate, rather than enrollment numbers.