As a postsecondary degree has become more important than ever in the labor market, and the primary means by which one enters the middle class, the U.S. has simultaneously made it more difficult and more expensive to attain.

Over the course of three decades, the cost of public colleges and universities—which educated nearly 3 in 4 students—has risen dramatically. The obvious result has been an increased reliance on debt as a way to finance a college education. Just 25 years ago, if a student wanted to attain a bachelor’s degree, it was more likely than not that he or she would be able to do so without borrowing. Now, borrowing is nearly required to graduate with a four-year degree, particularly for low- and middle-income students and students of color.

As student debt continues to make up a larger financial obligation for American households, it is imperative that we provide student borrowers with mechanisms to pay back their loans as quickly as possible. One way to do so is to provide them with an opportunity to refinance federal and private student loans down to current interest rates, thereby lowering their monthly payment and saving potentially thousands over the life of their loan.

Here's how that would work:

 

Of course, tackling student debt requires dealing with its root causes—namely, the increasing cost of college and years of state disinvestment in higher education.

Demos is releasing a proposal to do just that, by using federal leverage to encourage states to return to investing in higher education as a public good, and returning us to a system of largely debt-free higher education.