If The Next President Wants To Fix College Affordability And Student Debt, Here's Where He/She Should Start

This piece was posted earlier with a video on LinkedIn.

One of the most important issues the next president of the United States will face is how to make college affordable for millions of students wanting to enroll and millions more struggling to pay off their student loans.

The president won't be able to solve this problem alone. He or she will have to craft a college affordability policy that draws bipartisan support from Congress, state governments, and colleges and universities. This will require compromise.

Some 42 million Americans now owe $1.3 trillion in student loan debt; this is more than our nation's total mortgage debt and growing. It amounts to 10 percent of all household debt.

The average student debt
at college graduation has grown from $10,000 in 1993 to more than $35,000 this year. Some students owe tens of thousands of dollars more. This situation is intolerable and must not continue.

Here are four things our next president should do. This is far from a complete list, but can serve as a start:

1) Reduce or in some cases eliminate the amount due on student loans.

Bard College President Leon Botstein recently proposed that "all outstanding student loan debt should be forgiven." But realistically, winning congressional approval for writing off $1.3 trillion in student loan debt would be extraordinarily difficult, if not politically impossible.

Botstein also proposed that "a new loan program should be created that is tied to incentives for college graduates to choose careers in public service and which indexes payment to income." That's a more realistic idea and well worth doing. It could be strengthened by forgiving all or some of the loans of students who have worked in public service for several years.

In addition, the president could propose allowing students and former students to refinance their loans at current interest rates, which could be subsidized to lower rates even more. This would cut the size of student debt dramatically and be an important stimulus to the economy.

2) Increase financial aid to low-income students.

If the next president and Congress increase federal Pell Grants for low-income students, more could afford to go to college and they would have less debt. Pell Grants went to 8.2 million students in the 2014-15 academic year, amounting to more than 40 percent of the nation's undergraduates. Most of these students came from families with annual incomes below $40,000.

The Pell Grants now provide up to $5,815 annually for a low-income college student. But while the maximum Pell Grant provided about 80 percent of the total cost of attending a four-year public college (including room and board) in the 1970s when the program began, the grant now covers just 30 percent of the total cost at a public college and only 17 percent at a private school on average. That's simply inadequate and just wrong.

A Pell Institute for the Study of Opportunity in Higher Education study has proposed increasing the maximum Pell Grant to $13,557 a year, with half the funds coming from the federal government and half from the states.

I think we should double that number, particularly for high-achieving students, who have the potential to do so much for our nation and the American people. Increasing Pell Grants dramatically to students at the bottom financially - but at the top academically - could be a boon to creativity, a stimulus to moribund demand and provide payback to our society in a very short time.

And before some turn tail on the idea as impractical, we should remember that in other countries, such as Germany, France, Sweden and Finland, a college education is essentially free.

3) Partner with states to increase aid to public colleges and universities.

According to a study by the American Academy of Arts & Sciences: "Between 2008 and 2013, states cut appropriation support by more than 20 percent per full-time equivalent student in the median public institution, and cut support to the median public research university by more than 26 percent." Because of this and other factors, the average cost of attending an in-state public college rose by more than 40 percent in the past decade after adjusting for inflation.

President Donald Trump or President Hillary Clinton could propose big increases in aid to public colleges and universities, contingent on states matching a portion of the increased federal aid. Colleges could be required to use the new funds to increase need-based scholarships and enroll more academically qualified low-income students.

4) Work with colleges to increase the graduation rate of students.

The U.S. Education Department reports that "nearly half of all students who begin college do not graduate within six years, and the consequences of taking on debt but never receiving a meaningful degree can be severe. Students who borrow for college but never graduate are three times more likely to default."

There's no simple solution to this problem that can be summarized in a few sentences. Approaches that experts have suggested include:

• Hiring more high school counselors to help students pick the college that best meet their needs, and hiring more academic advisers for students in college to help them succeed. Online counseling tools could also be utilized.

• Pairing students in danger of leaving college with a mentor who can offer financial, academic and career advice.

• Increasing need-based financial aid, setting up food banks and finding housing for homeless students, so low-income students don't have to leave college to work fulltime.

Peter McPherson, president of the Association of Public and Land-grant universities, wrote recently in the Los Angeles Times: "Nearly 500 public universities have pledged to collectively increase the number of Americans earning a degree and share best practices that help to move the needle." That's an important step forward that deserves the support of the president of the United States.

Enabling more students - particularly those who are at the top academically - to attend college without piling up huge debt shouldn't be a partisan issue. It should be viewed as an investment in a more prosperous and healthier future for our entire nation and be embraced as a goal by whoever becomes our next president.

Former New York City Schools Chancellor Harold O. Levy is executive director of the Jack Kent Cooke Foundation, which has awarded over $152 million in scholarships to nearly 2,200 high-achieving students from low-income families and over $90 million in grants to organizations that serve such students.