In addition to providing must-watch late night television, student debt continues to play a role in the presidential election. On May 23, Mitt Romney unveiled his own education plan, "A Chance for Every Child: Mitt Romney's Plan for Restoring the Promise of American Education."
While the plan is relatively lacking in shock-value, your Student Loan Ranger will take a stab at breaking down its implications for higher education from our own inimitable student debt perspective.
According to A Chance for Every Child, higher education is ensconced in a "new normal" in which "education is unaffordable, a government loan is an entitlement, default is the norm, and loan forgiveness is the expectation." Despite this somewhat hyperbolic description, the issues it highlights are not unfamiliar to even casual followers of higher education or this blog–although our take on some of these issues may differ from Romney's.
For example, the report worries about a misplaced focus on four-year degrees, claiming two-year degrees, occupational certificates, and apprenticeships may be more appropriate for many jobs. (We prefer to highlight how community college can help reduce student debt and keep low-income students in school.)
[Get tips on how to finish community college.]
It states that prioritizing college access has distracted attention from college completion. (College completion is a real issue, especially for low-income and minority students, but conflating those two might be a bit of a stretch.)
It appears we all agree that skyrocketing college tuition (although this is understated by the paper, which says nearly half of undergraduate students take out loans to pay for college when it's actually two-thirds), a total student debt burden over $1 trillion and rapidly rising default rates are big problems.
[Find out how to pay for college.]
So what would a Romney presidency look like for college students? A Chance for Every Child proposes a number of small bore reforms that are similar to proposals already made by the Obama administration.
Romney would "make it clear" that the federal government will not reward universities for increasing tuition and would support institutions that are driving down college costs. (President Obama said this in January.) He would simplify the federal financial aid system ("simplification" sounds great but not if it means a reduction in the availability of federal financial aid) and "refocus" Pell grant dollars on the most needy students. (If by "refocusing" Pell grants Romney means a further tightening of requirements, which translates to fewer grants, the Student Loan Ranger would definitely oppose that.)
[Read about current changes to Pell grant eligibility.]
And Romney would enter into public-private partnerships to ensure students and their families are able to make informed decisions about college. (We believe the financial disclosure work already being done by the Consumer Financial Protection Bureau addresses this.)
But what might be more problematic for those unable to afford college or struggling with student debt is not what Romney proposes but what he opposes. In addition to tightening their eligibility requirements, he appears to be against increasing funding for Pell grants. At the same time, he opposes "gainful employment" regulations implemented by the Obama administration aimed at preventing students from racking up student debt in pursuit of degrees issued by sub-par schools.
A Chance for Every Child also takes aim at improvements designed to cap monthly student loan payments at 10 percent of borrowers' incomes. If you're reading this blog, you probably already know that we think ensuring borrowers can afford their monthly payments is a good idea and that we support President Obama's Pay As You Earn proposal to speed up implementation of the 10 percent cap.
And while stating "loan forgiveness is the expectation" may be mere campaign rhetoric, it may also be an indication that Romney would attempt to dismantle programs like Public Service Loan Forgiveness.
Finally, A Chance for Every Child decries the termination of the FFEL loan program, despite the fact that revoking this subsidy to private banks was projected to reduce the deficit by $68 billion between 2010 and 2020 and reduced incentives that led some student loan banks to make illegal payoffs to college financial aid officials.
Overall, Romney's plan appears at best to continue policy proposals already made by the Obama administration but would prioritize public-private partnerships rather than utilizing (currently) existing government agencies like the Consumer Financial Protection Bureau.
At worst, it could provide a basis for reducing or eliminating programs like Pell grants, income-driven repayment plans and loan forgiveness, and consumer-friendly regulations like the gainful employment rule. Absent a feasible plan to reduce the cost of college and lower skyrocketing tuition–and there is no such plan in A Chance for Every Child–this could be a financial disaster for thousands of college students and graduates.
What do you think? Let us know by commenting below. You can also comment and keep up with the latest news by following us on Facebook and Twitter (use the #studentdebthelp hashtag). And if you need help managing your student debt, download our Educational Debt Manual and attend one of our free student debt webinars.
Isaac Bowers is a senior program manager in the Communications and Outreach unit, responsible for Equal Justice Works' educational debt relief initiatives. An expert on educational debt relief, Bowers conducts monthly webinars for a wide range of audiences; advises employers, law schools, and professional organizations; and works with Congress and the Department of Education on federal legislation and regulations. Prior to joining Equal Justice Works, he was a fellow at Shute, Mihaly & Weinberger LLP in San Francisco. He received his J.D. from New York University School of Law.