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New Demos Reports Make Case for Debt-Free College in US and Detail How to Achieve It

Today, Sec. Hillary Clinton will announce her plan to return to debt-free public college for future students and relieve the burden for existing borrowers. In anticipation of the release of Sec. Clinton’s plan, Demos prepared two new analyses that underscore the need for bold solutions to our college affordability crisis.

For generations, policymakers recognized higher education as a necessary public good and adequately funded the public higher education system. But over the past few decades, public officials have strayed from this mission, drastically slashing state spending per-student. Now, nearly three-in-four graduates take on debt for a degree, and average debt for those who attain a bachelor’s degree has reached $30,000. In the current system, loans are the primary financing mechanism, where they were once a last resort.

In the new Demos report “The Case for Debt-Free Public College,” Demos Senior Policy Analyst Mark Huelsman explains how this shift occurred, highlights the negative and often disastrous impact on new college graduates, especially low-income students and students of color, and answers frequently asked questions about how implementation of a debt-free public college plan would work. Huelsman explains that debt-free college means that a student’s total unmet need for the entirety of their education is reasonable so that they do not have to borrow, and he makes clear that this standard is wholly achievable through the right mix of incentives for states, colleges, and students.

“A return to debt-free public college would signal that your family’s economic circumstance does not dictate your destiny.”

“A return to debt-free public college would signal that your family’s economic circumstance does not dictate your destiny,” said Hueslman. “It would rightly provide today’s students, the most diverse our nation has ever seen, with the same support previous generations enjoyed.”

In “New Hampshire’s Great Cost Shift: How Higher Education Cuts Have Fueled Student Debt Undermine the State’s Future Middle Class,” Demos Senior Policy Analyst Robert Hiltonsmith examines the effect of higher education cuts in New Hampshire. As a result of drastic cuts to higher education investment, New Hampshire has the highest average tuition and fees of any state, making college increasingly unaffordable for the state’s students. Over the past two decades, average yearly tuition and fees at public four-year institutions in New Hampshire has risen by $9,105, a 161 percent increase. Tuition and fees have risen almost as quickly at 2-year institutions, climbing 114 percent, or $3,922, over the same period. Finally, because of the state’s nation-high tuitions, New Hampshire students graduate with the highest student debt levels in the country.

“With the recent cuts in higher education funding, New Hampshire is endangering the quality of its institutions of higher learning and threatening the state’s economic competitiveness and the future of its young people,” said Hiltonsmith. “The state is a prime example of why we need to recommit to debt-free college. Not only do the quality of life for thousands of students hang in the balance, but so does the economic vitality of the state.”

These reports continue Demos’ investigation into ways to reinstate the country’s once debt-free system of higher education in the 21st century. Demos has documented how declining state investment is driving the need for students to borrow and has put forth policies to reverse these trends. In 2014, Demos released a proposal for a federal-state partnership to achieve debt-free college, and in a joint paper earlier this year,Demos and the Progressive Change Campaign Committee (PCCC) outlined how all public universities and colleges can achieve debt-free education through federal aid to states, increased aid to students, andinnovation to reduce the underlying costs of college.

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Contact:
Donté Donald, Associate Director of Communications
212.485.6062

[email protected]