Democratic front-runners Hillary Clinton and Bernie Sanders have both come forward with plans to address the negative effects that federal lending practices have on the students they are supposed to help.

Clinton and Sanders address the student debt crisis with their respective proposals The New College Compact{: target="_blank" rel="nofollow"} and College For All{: target="_blank" rel="nofollow"}.

In the New College Compact, Clinton writes, “Forty million Americans have student loans. Together, they owe more than a trillion dollars. And millions of Americans are delinquent or in default. Even if they do everything they can to pay their loans, they just can’t keep up."

Clinton has also been quoted as saying{: target="_blank" rel="nofollow}, “No family and no student should have to borrow to pay tuition at a public college or university. And everyone who has student debt should be able to finance it at lower rates."

Sanders expressed similar sentiments during a <a href="http://www.ontheissues.org/Archive/2015_Forbes_Bernie_Sanders.htm){: target="_blank" rel="nofollow} at the [University of Iowa](https://www.noodle.com/colleges/coa4/university-of-iowa" target="_blank">speech: “It makes no sense that students and their parents are forced to pay interest rates for higher education loans that are much higher than they pay for car loans or housing mortgages." He argued for returning any profits to borrowers via loan forgiveness or reduced interest rates. In a later interview{: target="_blank" rel="nofollow}, Sanders asserted that "education should be a right, not a privilege," and called for a revolution in the way the United States funds higher education.

Clinton Incentivizes “No-Loan" Tuition

Clinton’s New College Compact allocates an estimated $350 billion across a range of programs to make paying for college more affordable, though not every program or reform outlined in the proposal will necessarily find its way into a finished bill or stay in effect if passed.

“The compact proposed by Hillary Clinton is a strong starting point for a discussion that zeroes in on the issues that are in the public mind and have been raised by leaders in both parties: accountability, outcomes, college costs, and manageable loan repayment," Robert Shireman, a former U.S. Department of Education official, told the <a href="http://www.nytimes.com/2015/08/10/us/politics/hillary-clinton-to-offer-plan-on-paying-college-tuition-without-needing-loans.html){: target="_blank" rel="nofollow"}. Of the $350 billion, half is earmarked to be paid out over ten years to reduce tuition at public colleges and universities. The goal is for every student to be able to afford college without borrowing money. Community college would be free, as under [President Obama’s recent proposal](https://resources.noodle.com/articles/free-community-college-will-it-really-solve-the-problem-bottom-lines-greg-johnson-weighs-in" target="_blank">New York Times, but four-year schools would still charge some tuition based on each student’s ability to pay. The proposal states: “Families will be expected to make a realistic and simplified family contribution. Students will contribute based on wages from ten hours per week of work."

As for living expenses, Clinton’s proposal says that “students who qualify for Pell Grants will be able to use them for living expenses  —  and middle-class students will get more help to cover their living expenses, too." Under this plan, states would also gradually need to increase their contributions to their public colleges and universities; massive cuts to their budgets would be prohibited immediately.

The Clinton proposal includes both incentives and deterrents to prompt schools to increase graduation rates. Among other things, the plan seeks to ensure that schools spend federal dollars on teaching and research rather than marketing or outsized administrator pay: “It’s time to show some tough love to colleges and universities that let significant numbers of students fall behind and drop out, year after year."

One cause for concern, according to an article in the Daily Kos{: target="_blank" rel="nofollow"}, is that accountability measures designed to target predatory institutions — such as for-profit schools whose graduates emerge with large debt loads and meager employment prospects — might end up affecting public institutions in areas in which there might be external reasons for graduates failing to find jobs, such as the relatively low availability of employment in certain rural areas.

As proposed, the federal government would refuse money to states that fail to comply with the law. Or states could opt out of federal funding, as some states did in refusing the federal Medicaid expansion under the Affordable Care Act.

Clinton Plan Addresses More Than Just Tuition

Using federal money to reduce tuition at public colleges and universities is just one aspect of Clinton’s proposal. It also includes an expanded GI Bill for veterans, a renewal of the American Opportunity Tax Credit (which provides education tax rebates for students who perform community service), and federal student aid for job training courses. The plan also calls for loan repayment plans to align with income so that borrowers never pay more than 10 percent of their earnings. In addition, undergraduate student loans would be forgiven after 20 years of repayment. Finally, federal student loan interest rates would be lowered, and debt-ridden graduates would have the opportunity to refinance their loans at lower rates. Clinton’s plan{: target="_blank" } also seeks to expand AmeriCorps{: target="_blank" rel="nofollow" }, a program that encourages graduates to enter into service careers. Under the plan, students would be able to avoid loans or have their existing loans forgiven if they join the program, in which members perform “two years of community service and one year in a public service job." Students who wish to combine public service with a reduced-cost education may consider taking advantage of the AmeriCorps program, but those without savings or generous parents may find joining the program unrealistic: AmeriCorps pays its members an extremely small <a href="http://www.nationalservice.gov/sites/default/files/documents/NCCC_Member_Handbook_Sec3.pdf){: target="_blank" rel="nofollow"} rather than a salary that is minimum wage or higher, and many members have to supplement their income with food stamps. cost-of-living stipend (Volunteers In Service To America" target="_blank">AmeriCorps VISTA programs prohibit members from having second jobs{: target="_blank" rel="nofollow"} to pay expenses.

Critiques have come from the right as well as the left. From the right, Forbes contributor Mark Hendrickson writes{: target="_blank" rel="nofollow"} that students are consumers, and education is a product (not a public good) — and should be paid for as such.

For a critique from the left, one needs to look no further than Clinton’s rival for the Democratic nomination, Bernie Sanders, and his supporters. In College Affordability: Comparing the Clinton and Sanders Plans, Heather Gautney, who is affiliated with Sanders's campaign, contrasts Sanders’s competing college affordability package with the New College Compact. While Gautney acknowledges that Clinton’s program “would be a considerable improvement on the status quo," she argues that it “fails to place the issue of college affordability in the proper context: as a societal, rather than an individual, problem." College, she writes, should not merely be “within reach" for Americans, but it should be readily available as a public good.

Sanders Proposes “No Tuition" Rather Than “No Loan" Plan

Sanders’s College For All Act would have the federal government send money to every state that agreed to make its public colleges and universities tuition-free regardless of student income — so even students who could afford to pay would not have to do so.

A comparison of the Sanders “no-tuition" plan with Clinton’s “no-loan" plan shows, as their respective names suggest, that Sanders’s plan would not charge students at all for tuition, whereas Clinton’s plan would seek to make college tuition affordable. (In both plans, community college tuition would be free, as under President Obama’s plan.)

Gautney also notes that under Clinton’s plan, middle-class families might still have to take on debt to pay tuition bills, borrowing against their house or on credit cards. Speaking for Sanders, she also disagrees with the work requirement for underprivileged students attending state schools, saying it can be difficult for students carrying a heavy class load: “Work-study programs are much more helpful in this regard." Indeed, the Sanders plan would triple the size of the federal work-study program.

Under the Sanders plan, any student could use need-based aid from any source to cover room and board, books, and living expenses. As with Clinton’s plan, the Sanders plan would end the use of student loans as a source of revenue for the federal government, meaning interest rates would be lowered so that the government would not turn a profit on students paying back their loans. The Sanders plan would also “allow students to refinance at significantly more favorable rates. (Under current conditions the undergraduate student loan rate would drop from 4.29 percent to 2.37 percent.)" And like Clinton’s plan, Sanders’s proposal{: target="_blank" rel="nofollow"} would require state schools to meet certain guidelines, such as having 75 percent tenured or tenure-track faculty within five years of the plan’s enactment.

Either Candidate to Face Challenges if Elected

An article in U.S. News and World Report {: target="_blank" rel="nofollow"} summarizes where the money would come from to pay for the candidates’ proposals. Clinton’s $350 billion plan is in line with President Barack Obama’s proposal to limit itemized deductions for high-income households, which would yield more than $600 billion over the next ten years.

Sanders’s plan, on the other hand, is a $70 billion annual proposal that “would be funded by imposing a tax on transactions by hedge funds, investment houses, and other Wall Street firms."

For all the discussion about the competing philosophies and provisions of the New College Compact and College For All, it’s by no means a foregone conclusion that even if Clinton or Sanders became president, either of their proposals would survive the legislative process intact, especially given that President Obama’s less ambitious initiative for free community college has yet to receive any bipartisan support in Congress.

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