Debt Free College for AllADA’s vision: Free, Universal, High-Quality Public Education is a pillar of our democratic society and essential for its economic and cultural growth, is a fundamental right of all children and adolescents – from early childhood through college – in the United States and its territories.
For higher education, ADA’s goals are:
Long term Goal:
All students should have the ability to attend public and private colleges and universities, graduate schools and professional schools and to graduate without debt.
Middle term goals:
a. Set national goals of enabling all students to have access to a high quality debt-free college education attainable at any in-state public college or university, of increasing college completion rates by 25 percentage points within 10 years, and of eliminating discrepancies in graduation rates based on race and income.
b. Leverage federal dollars through matching grants to encourage states to increase funding for public colleges and universities, increase their investments in public education, bring down prices, improve outcomes for students, and make sure that every state university system in the country offers at least one path to a debt-free college degree for all students.
c. Provide funding for all students to be able to attend community colleges and historically Black, Hispanic and Native American colleges and to graduate without debt.
d. Expand Work Study program to include more students and more colleges that can offer part-time employment with a focus on funding schools that enroll high numbers of low-income students.
e. Pass legislation to allow, as was possible before 2005, federal student loans to be automatically dischargeable after five years of repayment, with borrowers able get out of them earlier if they prove that repaying them would cause an “undue hardship.”
f. Tighten the rules to keep institutions from deceiving students and misusing federal funds, and close loopholes that permit for-profit schools to prey on veterans and others students.
Short Term Goals:
a. Improve Pell Grant program with mandatory funding, year-round accessible grants indexed to inflation and covering tuition and the bulk of non-tuition costs for all students with need and for veterans.
b. Reform student loan programs by lowering interest rate to 2.32%(with 6.5% cap), ending federal government’s profiting from student loans, and allowing students and their parents to refinance their loans at lower rates, to expunge certain student loans through bankruptcy, to have student loan debts treated far less onerously than are credit-card debt and mortgages.
c. Ensure that all institutions receiving federal funding are doing their part to make college degrees more affordable and accessible for all students.
Additional changes needed in the rules of the student loan programs.
a) Federal loans should offer “public service pays” programs that provide year-by-year loan forgiveness in exchange for public service.
b) All student borrowers should be automatically enrolled in income-based repayment plans, with loan forgiveness options. Borrowers who do not wish to use repayment plans would be able to opt out of them while those with private loans should be able to refinance into federal programs.
c) Repayments should depend on the graduate’s income and streamlined with one annual payment made to the Internal Revenue Service. The repayment terms should be more generous for low- and moderate-income students than the current 10 percent or 15 percent of discretionary income earned each year after college.
d) Set up a system for borrowers to register complaints about the loan servicers that collect student-loan payments on behalf of the government, and subject servicers to stricter federal oversight and requirement for them to be more proactive in reaching out to distressed borrowers and offering better repayment terms.
Additional Actions Needed to Reduce Growth of College Costs and Hold Colleges/Universities Accountable
a) Require schools to spend a minimum proportion of their federal financial aid revenues on expenses directly related to classes and financial aid.
b) Create and implement concrete rules and caps for advertising, including that no federal money should be used for advertising.
c) Give colleges incentives to cut costs by establishing “shared savings.”
d) Improve and standardize transfer credits between state and community colleges.
e) Set and expand strict accountability targets as in President Obama’s efforts to prevent abuse, to enforce the new gainful employment rule, to require colleges to meet accountability targets in recruitment, completion, and risk sharing.
f) Institutions should be required to produce data on the graduation rates of Pell Grant recipients and other underserved students, alumni employment status and enrollment in graduate school, cumulative debt for graduates and non-graduates, graduates’ debt-to- income ratios, and other crucial data.
g) Require institutions with large endowments to use their own funds to guarantee debt- free college, rather than subsidizing extremely wealthy institutions that can afford it.
h) Colleges and universities, especially public ones, need revenue to pay faculty and staff adequate wages commensurate with their own educational attainment and professional role, build and maintain facilities, and keep the lights on.
i) Tighten the rules to keep institutions from deceiving students and misusing federal funds, and close loopholes that permit for-profit schools to prey on veterans and others students.
j) End Congressional protection of for-profit “higher education” industry from real accountability.
Other Steps to Restore State Funding and Investments in Higher Education.
a. Stop states’ cuts to higher education support. States that do not maintain minimum levels of investment in their own schools should not have access to federal aid.
b. States should provide some debt relief now by refinancing both public and private student loans.