SYRACUSE, N.Y. — Student-loan debt now exceeds the amount Americans owe on credit cards and in auto-loan debt.
That’s according to U.S. Senator Charles Schumer (D–N.Y.), who on Monday visited Syracuse University (SU) to promote a group of bills that he contends would help alleviate student-loan debt and make college more affordable.
“These days, college is becoming almost a necessity, but it is priced like a luxury,” Schumer said in his remarks.
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The proposals are part of the “RED Act” (RED is short for Reducing Educational Debt), which lawmakers are promoting as #InTheRed, which targets students who have debt, or are “in the red.”
“The idea is higher education shouldn’t put students in the red. And our goal over the next few years is to have people graduate debt free,” Schumer added.
A group of SU students surrounded the Senator as he spoke in Joseph Strasser Commons in Eggers Hall, which is part of the complex that is home to SU’s Maxwell School of Citizenship and Public Affairs.
The legislative package, which Senate Democrats first announced at a press conference in the U.S. Capitol, is currently comprised of three existing proposals, Schumer’s office said in a news release.
One plan would make two years of community college tuition free, another would adjust Pell Grants for inflation, and a third proposal would allow borrowers to refinance their existing student loans at lower interest rates.
Further details
The proposal would create a new partnership between the federal government and states to help them waive resident tuition in two years of community college programs for eligible students, while promoting “key” reforms to accelerate student success, Schumer’s office said.
It would also provide a federal match of $3 for every $1 that the state pays to waive community college tuition and fees for eligible students before other financial aid is applied.
The RED Act would also give student-loan borrowers a chance to refinance their debt at the same low interest rates offered to new borrowers in the federal student-loan program in the 2013-2014 school year.
The RED Act would also ensure that Pell Grants keep up with rising costs by indexing the Pell Grant program to the Consumer Price Index (CPI) beyond 2017 with mandatory funding to “protect and sustain” its value into the future.
Without permanent CPI indexing, the purchasing power of the Pell Grant will “erode,” making it harder for students and families to afford college, according to Schumer’s office.
Paying for it
How does the federal government help pay for this? Schumer pointed to the Buffett rule.
“The Buffet rule says that if you’re a millionaire, you ought to pay the same rate of taxes as … the average person,” said Schumer.
President Barack Obama in 2011 first proposed the Buffett Rule, or the Fair Share Tax, which would require people making $1 million or more a year to pay at least 30 percent of their income, after charitable contributions, in federal taxes. It is named after investor Warren Buffett who had said he was in favor of higher taxes on the wealthy.
Schumer also suggests eliminating tax breaks for oil companies.
“We’re trying to move in this area of climate change to where we use more solar energy, more wind energy, more geothermal [methods],” said Schumer.
Rising student debt
Schumer’s office cited information from the nonprofit Institute for College Access & Success (TICAS) indicating the share of graduates with debt rose from 65 percent to 69 percent between 2004 and 2014.
In addition, the average debt at graduation rose at more than twice the rate of inflation.
TICAS also indicated the average college graduate in New York has $27,822 in student-loan debt.
The nonprofit TICAS also indicated the proportion of New York college graduates with student-loan debt is about 61 percent.
Contact Reinhardt at ereinhardt@cnybj.com
