On the Issues: student debt

With the presidential campaign raging on, most candidates have at least put some semblance of a platform regarding student debt into public view. We’re here to wade through all the political rhetoric to give you the candidate’s positions as clearly as possible.

Former Florida Gov. Jeb Bush

Bush delayed on releasing a student debt plan for months, but eventually delivered a highly specific proposal. He wants to reform the incentives of college tuition. Instead of distributing large amounts of federal aid for tuition, he would give a capped $50,000 line of credit in what he calls an Education Savings Account (ESAs). For each $10,000 spent from this account, the federal income tax of the student will increase by 1 percent of his/her income. This add-on will happen for the first 25 years after graduation. Need-based Pell Grants would also be distributed through these accounts. Students with existing debt would be able to make use of the ESAs as well.

Bush also wants to give universities an incentive to have students pay their loans by putting universities partially on the hook for student loans after a default. This would, in theory, give universities an incentive to help students either not to have debt to begin with, or to be able to pay off their loans easily.

It’s unclear what the mechanism is, but Bush also claims he will encourage innovation in education. He will also expand access to federal aid for students enrolled in vocational education and apprenticeship models among other things. He also plans to expand access to information about the outcomes of various forms of education to ensure there is a high return on investment for tuition.

Former Neurosurgeon Ben Carson

Carson wants to reign in interest rates by having students only be responsible for the principle on tuition while having colleges pay interest. He also wants financial incentives in place for colleges to maximize the effect of tuition money, allowing costs to shrink for students.

New Jersey Gov. Chris Christie

Christie wants to make college affordable, but believes free college is not a good goal since there is an economic return. He believes colleges should publicly disclose expenses to raise accountability. He also believes Congress needs to put more effort into making sure need-based aid is actually distributed based on need. Christie has also mentioned the idea of tax credits for donors to increase the money universities already have and the possibility of a futures market for tuition.

Senator Ted Cruz (R-TX)

Cruz will occasionally mention his own student loans, but does not seem to have put forward a plan for student debt beyond saying he would prefer transferring loans to states. In 2014, he blocked a bill that would have allowed many students to refinance their debt.

Former Hewlett Packard CEO Carly Fiorina

Fiorina believes the federal government nationalizing student loans has created a monopoly that allowed thereby interest rates to skyrocket, expanding costs. She also believes accreditations are too stringent. To fix this, she would end national federal aid to create a free marketplace for tuition and roll back regulations on for-profit universities and other education options that previously were barred from accreditation.

Former Virginia Governor Jim Gilmore

Gilmore does not appear to have mentioned the issue of student debt.

Ohio Governor John Kasich

As governor, Kasich recently signed into law a bill that froze tuition at public universities in Ohio and commissioned a nine-member panel that studied how to best manage money at universities. He also expanded access to AP classes and other forms of receiving college credit in high school such as summer school to bring down costs. Further, he set aside $120 million as a debt relief fund. He has mentioned this on the campaign trail as well as shifting tuition to being based on course completion and graduation rather than enrollment.

Senator Marco Rubio (R-FL)

Rubio would help expand information available to students to help them decide on things like university, major, vocational education, and other choices based on outcomes to make students more secure in their investments. He also wants to create a futures market for college tuition where a student could have investors pay for their tuition and pay back a percentage of their income as time goes on. Rubio also proposed creating one post-secondary education tax provision to simplify the deductions currently available.

Rubio also wants to reform accreditation, although it’s unclear how.

Trump Entertainment Resorts Owner Donald Trump

Trump has harshly criticized the federal aid program saying it is “…not fair. It is one of the only places, frankly, where our country actually makes money.” He has not put forward his own plan.

Former Secretary of State Hillary Clinton

Secretary Clinton wants to expand aid to states and possibly condition some of it on cutting costs to help bring down tuition. She wants students to attend college debt-free, including having students work a minimum of ten hours per week. She would make community college tuition free and would allow college graduates to refinance their debt and lower their interest rates.

Senator Bernie Sanders (I-VT)

Sanders wants to make public tuition free and wants to prevent the government from profiting on student loans. He also wants to cut down interest rates and make it possible for students to refinance their debts at interest rates similar to other industries’ current low rates. His most common example is the automobile industry. He claims that a citizen can get a loan on a car for 1–2 percent interest whereas a student will be forced to pay 5–7 percent interest on a federal loan. He wants to allow students to use need-based financial aid and work study to shrink debt at private universities in order to prevent inflating costs from making college inaccessible. He plans to pay this via a financial transaction tax on Wall Street speculation in order to slow high-frequency trading and riskier bets.