Two student-advocacy groups joined the chorus of critics taking on the nation’s trillion-dollar student-debt problem this week with calls to make the Pell Grant program a mandatory budget item, allow private-loan debt to be discharged in bankruptcy, and increase the minimum wage.
The proposals, dubbed the “New Deal for Students,” were drawn up by the United States Student Association and the Roosevelt Institute Campus Network.
The six-point plan would also set income-based repayment as the default option for federal student loans, with payment capped at 10 percent of a graduate’s discretionary income, and would freeze interest rates on federally subsidized Stafford loans at 3.4 percent.
The groups also called for changes in U.S. immigration law to allow “dreamers,” young immigrants who were brought to the United States illegally as children, a pathway to citizenship if they earn a college degree.
“Students who are just like us deserve equal access to affordable education,” Kalwis Lo, legislative director for the student association, said in an interview on Thursday.
Finding solutions is critical at a time when the nation’s student-loan debt has topped $1-trillion, the groups said.
Their proposals came amid a flurry of reports and recommendations released this week calling for better consumer information and more favorable loan terms for student borrowers.
President Obama, in his State of the Union address on Tuesday night, called on Congress to link some federal student aid to college “affordability and value,” and said that taxpayers could not “keep on subsidizing higher and higher and higher costs for higher education.”
On Wednesday his administration released a “College Scorecard” to help students and families compare colleges based on costs, potential earnings, and average student-loan debt.
Also this week, an advocacy group, Campus Progress, proposed that student-loan borrowers be able to lower their payments by refinancing their debt in the same way as homeowners, corporations, and governments.
And a number of organizations released papers this week as part of a project of the Bill & Melinda Gates Foundation called Reimagining Aid Design and Delivery. Those groups included the Education Trust, Excelencia in Education, the Institute for College Access & Success, and the National Association of Student Financial Aid Administrators.
Many of those, like the groups that issued the “New Deal for Students” proposal, have called for securing the future of the Pell Grant program by making it an entitlement, and thus a mandatory cost in the federal budget instead of being subject to the appropriations process each year.