In weekly calls and in meetings over the past few months, Hillary Clinton’s policy team has been soliciting input from policy experts with ties to Sen. Elizabeth Warren, with the goal of making student loan reform the core of Clinton’s economic agenda.
Nationally, the data demonstrates a vicious cycle of debt eroding future wealth creation, which can lead to more debt for future generations. According to a report by the think tank Demos, the effects of exorbitant student debt can linger long after college, with the average debt burden potentially costing grads more than $200,000 of lifetime earnings.
The progressive think tank Demos, which has been a leading voice in the progressive policy conversation and, according to Politico, has been consulted by Clinton's team, has laid out some ideas that could influence the agenda that Clinton unveils.
The most specific plan for debt-free college so far comes from Demos, a progressive think tank. It defines a "debt-free" degree as a degree students could pay for by working 10 hours per week at minimum wage while enrolled in college. That means students' cost of attendance not covered by grants and scholarships, including books, tuition, and living expenses, couldn't exceed about $2,500 per year.
Demos calls for the federal government to help states shoulder the cost of higher education.
The push for debt-free college began last September, when Demos, a liberal think tank, issued a plan that would make college debt-free for low- and middle-income families in some states, at a cost of around $30 billion. Four months later the Progressive Change Campaign Committee, or PCCC, began a campaign to press the Democratic candidates to back the idea.
Some community-college students don't get support from their families, while others had subpar high-school educations and have to play catch-up right away. In fact, a 2010 study by the public-policy organization Demos found that six out of 10 students entering community colleges have to take remedial courses to compensate for the skills and knowledge they never attained in high school.
Students have turned to loans to keep up with the price hikes. The class of 2015 has the most debt in U.S. history, with each student graduating with an average of $35,051 in loans. The national total recently reached an all-time high of $1.2 trillion.
Warren has led the charge in promoting college affordability as a major issue in the 2016 presidential race, calling for the elimination of student debt at public colleges. That debt-free college initiative, the brainchild of liberal think tank Demos, has been endorsed by Democratic contenders Sen. Bernie Sanders (I-Vt.) and former Maryland Gov. Martin O'Malley.
About 81 percent of black graduates of public colleges and universities have student debt, compared with 63 percent of white graduates, according to report by Washington think tank Demos. Latino students borrow at similar rates to white students.
In 2015, the average student borrower is graduating with about $35,000 worth of debt. Paid over the course of 10 or more years, the cost of repayment will include several thousand dollars more to pay off the interest that accumulates on the loan.
