With College Costs on Voters' Minds, Democrats Call for More Student Aid

Related materials

Blog: Read Campaign U., our blog about the 2008 race.

Articles:

• Urgent Calls for Higher-Education Reforms Face 2008 Presidential Contenders

• Concerns Over Economic Competitiveness Will Test the Next President

• Candidates Grapple With How to Expand Access to College

Article tools

Printer friendly	E-mail article	Subscribe	Order reprints
	Discuss any Chronicle article in our forums
Latest Headlines U. of Delaware Approves New Diversity Discussions for Students The new, voluntary program will replace one tossed out last fall after coming under criticism as "thought reform." In Tight Employment Market, Career Services Gain Clout Borrowers' Uncertainty Has Colleges in Quandary How It Does It: The RIAA Explains How It Catches Alleged Music Pirates State High-School Exit Tests Do Not Improve Academic Achievement, Study Finds Commentary Business Students Should Learn More About Science

By KELLY FIELD

As the annual price tag of a college education tops the $40,000 mark at more American institutions, anxiety about how to pay for a higher education continues to consume many middle-class and low-income voters.

At the same time, public outrage toward the student-loan industry has grown in the wake of recent scandals that uncovered questionable marketing and other practices among college financial-aid officers and private lenders.

It's no surprise, then, that the affordability of a college education is shaping up to be a key campaign issue in the 2008 presidential election — at least for the Democratic candidates.

So far, most of the candidates' proposals center on increasing the maximum Pell Grant and expanding tax credits for college expenses. Three of the Democratic contenders — U.S. Sens. Joseph R. Biden Jr., from Delaware; Barack Obama, from Illinois; and Christopher J. Dodd, from Connecticut — have promised to raise the maximum Pell Grant over five years to amounts that range from $4,310 to $6,300.

Luke Swarthout, an advocate with the U.S. Public Interest Research Group who specializes in higher education, says the issue of college affordability continues to hold broad political appeal.

"There are very few families that are wealthy enough to not have to worry about how to finance their children's education," he says. "That makes it a cross-cutting issue."

Candidates' Proposals

Among the candidates' proposals to expand or create tax benefits to help families pay for college, Mr. Biden's is the most detailed. He would replace two existing federal tax breaks for college expenses with a refundable tax credit of up to $3,000 that would cover the average cost of tuition and fees at a public two-year college and more than half of the average cost of tuition and fees at a public four-year college.

Mr. Biden argues that consolidating the tax credits would help students and families understand them. Now, 27 percent of tax filers who are eligible for a tuition deduction do not claim it, according to the Government Accountability Office.

Other Democratic candidates have offered more-modest tax proposals. John Edwards, a former U.S. senator from North Carolina, has proposed a $500 "Get Ahead" credit for college savings, and Mr. Dodd has said he would allow families to deduct up to $2,000 for money they set aside in Section 529 college-savings plans.

While U.S. Sen. Hillary Rodham Clinton's student-aid agenda is short on details so far, the Democrat from New York has offered legislation that would expand the Lifetime Learning tax credit to allow students to claim up to 50 percent of their tuition and other expenses, up from the current 20 percent.

Reforming Student Loans

The candidates are also responding to the student-loan scandal by promising better oversight of the federal guaranteed student-loan system and even threatening to abolish it altogether. And some candidates are proposing using the money that would save to pay for student-aid increases.

Two of the Democratic candidates — Mr. Obama and Mr. Edwards — would cut banks out of the student-loan system, freeing up billions of dollars in government subsidies that now go to the private lenders. Another candidate, Mr. Dodd, would set up government-run auctions in which lenders who agreed to accept the lowest subsidy rates would win the right to make loans to students in a particular region. Mr. Dodd estimates that his plan would save taxpayers a minimum of $18-billion over four years.

Michael Dannenberg, director of education policy for the New America Foundation, a public-policy group, says he is pleased the candidates are going after "inefficiencies" in the student-loan system. "We support efforts to reduce waste in the system so we can drive more money to students and families," he says.

But lenders, not surprisingly, are adamantly opposed to both proposals. Jeffrey R. Andrade, executive vice president of the U.S. Education Finance Group, says students are well served by the current competition between direct lending and the government-subsidized loan program. He warns that service would suffer and interest rates would rise under a government-run student-loan monopoly.

Other analysts criticize the Democrats for taking a piecemeal approach to college affordability. Arthur M. Hauptman, an independent higher-education-policy consultant, says the candidates need to look at the higher-education system more broadly if they really want to make college more accessible to low-income students.

"The system is a mess," he says, "and these are incremental changes at best."

Meanwhile, the Republican field has been mostly mum on college-affordability issues. With the exception of U.S. Rep. Ron Paul, from Texas — who would abolish the U.S. Education Department and make undergraduate tuition, fees, and living expenses tax deductible — the Republican candidates have offered vague proposals, if any. Mitt Romney, for instance, has touted the merit-scholarship program he helped create as governor of Massachusetts, but he has offered no specific plan for federal aid.

Richard K. Vedder, a professor of economics at Ohio University and founder of the Center for College Affordability and Productivity, says he would like to hear the Republican candidates talk about holding colleges accountable for their rising costs. He wants them to link federal funds to measures of how well the institutions rein in tuition.

So far, the only candidate who is considering such an approach is a Democrat: Senator Dodd. Borrowing an idea from the Senate's plan to renew the Higher Education Act, he has promised to publish a tuition-inflation index and a list of colleges whose tuition increases exceed it.

His campaign says the list would shine "a spotlight on the skyrocketing cost of tuition" and give families "a better idea of how much they can expect to pay for higher education while encouraging schools to act responsibly."