Sen. Bernie Sanders
Can Democrats really fix the student debt crisis when they've supported many of the policies that led to it? That's one question being raised as the party's 2020 candidates put a strong focus on fixing the problem during campaign stops and appearances on the primary debate stage.
Many of the party's leading candidates, including Sen. Bernie Sanders, Sen. Elizabeth Warren and Sen. Kamala Harris, have unveiled plans to reduce or cancel billions of dollars in student debt. Some Democratic candidates have also stated their intentions to address the rapidly rising cost of higher education and in some cases have proposed "free college" plans that would eliminate tuition for some students attending certain institutions.
However, some argue that costs and debt have skyrocketed as a function of the Democrat-supported 2010 Health Care and Education Reconciliation Act, which put the federal government, rather than the private sector, in charge of direct lending for student loans. Prior to the passage of that bill, when most student lending was handled by private institutions, the rate of student debt increased an average of $15 billion a year. In the nine years since the bill's passage, the rate of student debt increased an average of $88 billion per year, based on total debt numbers from an American Banker article.
Current Democratic presidential candidates who voted for the Health Care and Education Reconciliation Act include Kirsten Gillibrand, Amy Klobuchar, Sanders and Michael Bennett.
“The Budget supports pending legislation that would shift all Federal loans to the Direct Loan program, in which the Federal Government provides the capital for all new student loans and chooses private and nonprofit companies to service the loans," the Joe Biden Middle Class Task Force stated on moving to direct loans. "This shift will eliminate tens of billions of dollars in wasteful subsidies to banks and the resulting savings will be used to expand Pell Grants and invest in community colleges.”
Further, critics contend that by increasing access to student loans via the 2010 law, the government has played a role in helping to drive up the cost of college, while also creating more debt by giving loans to riskier borrowers who private institutions might not approve for loans. Critics also point to for-profit colleges that are approved for federal student loans. These colleges are charging on average 75 percent more than those that don't receive tuition payments via federal student loans, according to a study entitled "Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges" published by The National Bureau of Economic Research in February 2012.
Michigan Business Daily reached out to the campaigns of Harris and other candidates Pete Buttigieg and Cory Booker but did not receive a response.
The debate, hosted by CNN, will take place Tuesday, July 30, and Wednesday, July 31, at the Fox Theatre in downtown Detroit. The debate each night will start at 8 p.m. and last two hours. As before, each night will feature 10 candidates on stage.