Over the last several decades, paying for college has shifted ever more from a public responsibility to an individual one. Now, even after accounting for grant aid, college costs are high enough that the majority of students cannot earn a degree without taking on debt.
To cover the average cost of attending a four-year public college, students from families making $30,000 or less now need to spend 93 percent — nearly all — of their total family income, a recent analysis by The Institute for College Access & Success found.
This has created an untenable conundrum: A college credential is increasingly necessary for financial stability, but most students can’t afford to earn one without taking on debt. That debt is a heavy burden for many of those who complete a degree; it’s even worse for those who don’t complete a degree or who attended low-quality programs that failed to improve their employment prospects.
Families — and the nation’s economy — cannot afford for this to go on.
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In recognition of the burden this debt has placed on nearly 44 million Americans, the Biden administration has introduced a number of relief programs, including an improved income-driven repayment (IDR) plan called the SAVE Plan.
Under this new plan, the government would provide significant financial relief to borrowers by lowering monthly payments, keeping balances from ballooning and, for many, shortening the maximum repayment term.
These changes will be a financial lifeline for millions.
The Biden plan provides a critical safety net to protect students from the worst outcomes of debt, but it doesn’t address the barriers students face before they start school. Lower payments and debt relief programs reduce harm but do not reduce tuition costs. Nor do they solve the broader structural issues that students and recent graduates face: long-term declines in state funding for public colleges; stagnant wages; skyrocketing housing costs; and long-standing racial disparities in wealth attainment due to redlining and labor market discrimination.
Families — and the nation’s economy — cannot afford for this to go on.
Even with income-driven repayment plan protections in place, many students, including many first-generation students, are understandably debt-averse and may choose not to enroll — or may work too many hours to truly focus on school — rather than borrow.
Ultimately, Congress must address the root causes of the student debt crisis by enabling all students, regardless of family income, to earn a four-year degree at a public college without needing to borrow. Loans, even with back-end safety nets, are not a substitute for grants.
When policymakers act, they must address all college costs, not just tuition. Those include housing, food, child care, books and transportation, which are often more burdensome than tuition itself — especially for students from low-income backgrounds.
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To build this debt-free future, Congress must pair investments in grant aid with a federal affordability guarantee that is universal, easy to communicate and attractive to states with vastly different economic priorities. How?
Federal policymakers should work closely with state leaders to build a sustainable partnership that restores funding for public higher education, drives down tuition and sends more resources to historically underfunded schools.
Recognizing that higher education is workforce development, many states have blazed ahead with their own affordability programs. Take North Carolina: Its NC Promise initiative has lowered tuition costs to $500 per semester at four public institutions.
In New Mexico, through the New Mexico Opportunity and Lottery Scholarships, qualifying students can attend the state’s public colleges tuition- and fee-free.
States must balance their budgets, though, and many struggle to maintain these kinds of programs on their own. But the federal government can harness its unique spending powers to sustain and expand such promising programs and make it possible for more states to follow suit.
Any new federal-state funding partnership should be paired with a big boost to the Pell Grant program. The program enjoys strong bipartisan support and has spurred college enrollment and completion for low-income students for more than 50 years.
Today’s Pell Grants are flexible and enable students to access the institution of their choice, even if that institution is not covered by a state or federal affordability guarantee. Yet Pell Grants now cover the lowest share of college costs in the program’s history.
In 1975-76, the maximum Pell award covered more than 75 percent of the cost of attending a four-year public college. The current maximum award amount covers just 26 percent of that cost.
By boosting the Pell Grant and partnering with states to restore investment in public colleges — and lowering costs — we can eliminate the need to borrow to earn a four-year degree from any public institution.
The White House’s extensive student debt relief efforts would better protect and provide relief to the tens of millions of borrowers carrying heavy student debt burdens. It’s time for lawmakers to build on the administration’s promising proposals to ensure that future students no longer need to shoulder such a burden at all.
Michele Shepard is senior director for college affordability at The Institute for College Access & Success.
This story about ending student debt was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for Hechinger’s newsletter.
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