New Jersey Democratic Senator Cory Booker and Hawaii Democratic Senator Brian Schatz reintroduced the Debt-Free College Act, legislation that seeks to reverse the growing student debt crisis in the United States.
The bill aims to restore a path to affordable college by providing states incentives through matching grants to increase investments in public higher education and provide students with debt-free college.
If signed into law, the Debt-Free College Act would establish a state-federal partnership that provides a dollar-for-dollar federal match to state higher education appropriations in exchange for a commitment to help students pay for the full cost of attendance without having to take on debt.
“Higher education is one of the surest paths to economic security and prosperity for Americans, but the astronomical price tag means that ladder of opportunity remains elusive for many students,” Booker said.“Millions of students across the country are graduating with an unprecedented amount of student debt, and low-income students are hurt the most. By providing matching federal funds to states, our bill incentivizes states to help students pay for the full cost of a college degree – including the cost of living – without taking on debt,” Booker added.
Beyond tuition and fees, the total cost of attendance—room and board, books and supplies, and other expenses—has forced 44 million Americans to take on debt to cover their financial need. College debt has increased 170 percent since 2006 and now exceeds $1.5 trillion dollars, which is second only to mortgage debt and surpasses even credit card debt.
According to the Federal Reserve Bank of New York, student loan debt is responsible for 35 percent of the decline in homeownership since 2007. The percentage of younger people who reported owning a business was cut in half between 2010 and 2013. Pew Research Center found that about 50 percent of student borrowers say their loans increase their risk of defaulting on other bills.