It was Sanders who highlighted student debt
In his US presidential campaign, Democratic candidate Bernie Sanders brought America’s $1.3 trillion student debt issue into the spotlight. He highlighted the student debt crisis in the United States and explained his vision for reform to keep the economic system from succumbing to another debt crisis. His plan, which would have cost $750 billion over ten years, was to be paid through a federal tax on financing trade.
Debt-free college: Could that happen in the United States?
During the campaign, Hillary Clinton said debt-free college was unrealistic. But later, claiming that higher student debt is “holding our economy back,” she adopted a plan that was similar to Sanders’ proposal, but in modified form. She unveiled a multifaceted college plan that would cost $350 billion over ten years. The goals of the plan include ensuring that no student has to borrow money to pay for tuition.
Clinton is a strong proponent of debt-free public colleges in the United States (SPY) (IWM) (QQQ). She aims to “liberate millions of people who already have student debt by making it easier to refinance and pay what you owe as a portion of your income.”
The plan includes a proposal to eliminate college tuition fees for families with annual incomes of less than $125,000. It would apply to in-state public colleges and universities. The plan would eliminate federal support for trade schools and high-quality union training programs and give tax credits for companies that offer paid apprenticeships. It would probably be funded by cutting tax deductions for some high-income individuals.
The Republicans have a student investment plan
On the other hand, the director of Donald Trump’s campaign has widely rejected the idea of debt-free public college. The campaign is instead propagating the privatization of student loans. It’s proposing a student investment plan that would allow private investors to fund an individual’s education in return for a percentage of his or her income for a set period of time after graduation. According to the Republican platform, “the federal government should not be in the business of originating student loans.”
What regulators and policymakers need to understand is that while the US economy’s future growth depends to a large extent on higher education, the progress shouldn’t come at the cost of students drowning in debt.