Student debt levels have exploded relative to other forms of debt over the past decade in particular. Educational loan totals recently surpassed $1.4 trillion in the U.S., up from $550 billion in 2011 and only $90 billion in 1999. The average level of indebtedness upon graduation is up to $37,172 and there are 44 million student borrowers.
Default rates have crept up steadily to 11.2%, and if you include delinquency rates it’s as high as 25%. This is limiting the growth of our economy and also crippling the advancement of millions of young people in their careers and in starting families. We need to create a clear path out of this crippling debt.
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Problems to be Solved
- Education debt has exploded in recent years to unsupportable levels.
- Millions of young Americans owe tens of thousands of dollars in debt and face an uncertain financial future. Entire generations will have difficulty advancing professionally, starting families, buying homes and vehicles, and fueling the next level of economic growth due to high debt loads.
- There is low accountability for educational institutions that benefit from public financing while providing graduates little in the way of real opportunities.
- Lenders have little incentive to work with those in debt since bankruptcy doesn't eliminate student loan debt.
I understand student debt—I owed tens of thousands for years after graduating. It’s immoral how we have saddled so many of our young people with so many school loans, often for degrees that will not result in solid careers. It’s even worse if you don’t finish school - you still owe the money and don’t get the benefit of a degree. Too many of our young people have been sold false promises. We owe it to them to do all we can to reduce their burden and make it so that they will be able to move forward in gaining skills, building a career, starting a family and pursuing their ambitions. The future of our society depends on their success. As President I will see to it that the Federal government does not make one cent from providing educational loans to its citizens. I will make sure that students get the lowest possible interest rates and can refinance at those rates. I will explore a blanket partial reduction of outstanding student loans for recent graduates - call it the “Bailout for the People.” Indebted students deserve a bailout much more than the banks did. I will ask schools to forgive in part or in whole the debts of those who do not graduate. I will support a program that allows graduates to pay a percent of income instead of a fixed amount. I will establish a commission to reduce or forgive the loans of students who were induced to pursue a degree under false pretenses. I will make it easier to discharge school debt in bankruptcy. I will establish a grant program that forgives student debt for those who work in rural areas or with underprivileged populations. Last, I will gladly close schools that are essentially diploma mills preying upon the hopes and dreams of the vulnerable among us. There will be accountability for every dollar that the public is spending on school loans. We owe it to the next generation to get this right. We have to stop screwing young people and sticking them with the bill.
- Reduce the burden on millions of young Americans for their education
- Improve efficacy of funds invested in education
- Increase accountability of educational institutions
As President, I will...
- Immediately reduce the student loan payments for millions of Americans by ensuring that the American government does not profit one cent from its educational loan servicing and that students get the same interest rates as the wealthiest bank. Any profit that the government does realize will go into reducing rates the following year until profit is zero.
- Explore a blanket partial reduction in the principal of school loans, especially for recent graduates with the largest debt levels—the “Bailout for the People”—and forgiveness for debt beyond a certain period after graduation.
- Propose the 10×10 Student Loan Emancipation Act, a plan by which the federal government would buy student loan debt (negotiated rate with the private lenders) and allow students to opt into a plan to repay it through pledging 10% of their salary per year for ten years, after which the balance would be forgiven.
- Ask schools to forgive in part or in whole the debts of those who do not graduate.
- Initiate a program that allows graduates to pay a percent of income instead of a fixed amount.
- Establish a commission that will explore debt forgiveness or reduction for students who sought degrees under false pretenses.
- Change bankruptcy laws to make it easier to discharge educational debt.
- Expand a program that forgives the debt of graduates who work in rural areas or with underprivileged populations.
- Close schools with high loan default rates and consistently low employment placement success.
- Police and prosecute all marketing representations of schools that might induce enrollment under false pretenses.
- Allow student loan debt to be discharged through bankruptcy, thus forcing lenders to work with students in good faith to find workable repayment plans.