Schatz, Senate Democrats, Joined by College Students & Advocates, Unveil New Legislative Package & #InTheRed Campaign for 2016 to Reduce Student Debt and put Country on Path Toward Debt-Free College
Standing with Advocates & College Students Saddled by Student Loan Debt, Senate Democrats Unveiled A New Legislative Package and Campaign to Address College Affordability in 2016, Dubbed #InTheRed, That Seeks to Put the Country on a Path Toward Debt-Free College
Senate Dems Vow to Continue Efforts and Momentum From Last Week, In Which Dozens Of Dems Brought Attention To The New #InTheRed Campaign On Capitol Hill By Bringing A Local Student As Their Guest To The State Of The Union, Promoting the Campaign in Local Media, Wearing A “Students #InTheRed” Button, Posting To Social Media, & More
Senate Democrats To GOP: It’s Time to Pass Legislation That Ensures Higher Ed Doesn’t Put Students In The Red
WASHINGTON – U.S. Senator Brian Schatz (D-Hawai‘i) joined a group of Senate Democrats today to formally unveil a new legislative package and campaign, dubbed #InTheRed, aimed at pushing Congress to address college affordability in 2016 and putting America on a path toward debt-free college. The legislative package, which was first announced at a press conference in the U.S. Capitol building with Senate Democrats and dozens of students and advocates, is currently comprised of three Senate bills that would make two years of community college free, address the significant loss in value of Pell Grants by adjusting them for inflation, and allow borrowers to refinance their existing student loans at lower rates. Today’s announcement comes on the heels of the day of President Obama’s final State of the Union address, on which more than two-dozen Senate Democrats brought attention to the #InTheRed campaign by bringing a local student as their guest to the speech, promoting the campaign in local and national media, wearing a “students in the red button, posting photos, videos and graphics to social media, and more.
“With over a third of borrowers delinquent on their loans by 90 days or more, student loan debt now exceeds $1.2 trillion dollars. This level of college debt is not sustainable,” said Senator Schatz. “This is not just a student issue, it is a family issue that affects parents and grandparents who often times help pay those bills. We can’t continue to allow students and their families to be saddled with crushing debt simply for wanting to earn a higher education. That is why I support making college debt-free for all.”
Senator Schatz has been a vocal champion on issues that matter to students and families, including college affordability. Last year, he introduced the College Affordability and Innovation Act with Senator Chris Murphy of Connecticut. Their legislation would make college more affordable for students in Hawai‘i and across the country by prioritizing innovation and tying federal funding for colleges to their ability to meet affordability and student outcomes goals. In April, Senator Schatz also led a bicameral resolution to support efforts to ensure that students have access to debt-free higher education.
Senate Democrats also announced today, as part of the #InTheRed college affordability campaign throughout 2016, Senators will be visiting college campuses and meeting with Americans saddled with student loan debt as a way of highlighting the urgency for Congress to act to pass this legislative package and the overall need to put America on a path toward debt-free college. Senators will share the stories they hear on Capitol Hill over the coming months and urge their Republican colleagues to support this legislative package.
Specifically, the legislative package -- the RED (Reducing Educational Debt) Act -- contains three pieces of Senate legislation that seek to:
Make Two Years of Community College Tuition-Free
Under the RED Act, a full-time community college student could save an average of $3,800 in tuition per year, and, if all states participated under this program, an estimated 9 million students throughout the country could benefit. The legislation would also hold colleges accountable by making a condition of the grant that training programs are tied to the skills needed in today’s economy and that credits are transferable to four-year institutions. Specifically, this legislation:
- Creates a new partnership between the federal government and states to help them waive resident tuition in two years of community college programs for eligible students, while promoting key reforms to accelerate student success; and
- Provides a federal match of $3 for every $1 invested by the state to make waive community college tuition and fees for eligible students before other financial aid is applied; and
- Ensures that programs offer academic programs are fully transferable to four-year institutions in their state, or occupational training that leads to credentials in an in-demand industry; and
- Maintains and encourages state funding for higher education; and
- Establishes a new grant program to provide pathways to success at Historically Black Colleges and Universities and Minority Serving Institutions by helping them cover a significant portion of tuition and fees for the first two years of attendance for low-income students.
Allow Borrowers to Refinance Student Loans at Lower Rate
Under the RED Act, student loan borrowers would be given a chance to refinance their debt at the same low rates offered to new borrowers in the student loan program in the 2013-2014 school year. Specifically, this legislation:
- Allows eligible student loan borrowers to refinance their federal loans. All eligible federal FFELP and Direct student loan borrowers could refinance their high-interest loans down to the rates offered to new federal borrowers in the 2013-2014 school year under the Bipartisan Student Loan Certainty Act.
- Allows eligible student loan borrowers to refinance their private loans into the federal program. The bill provides those who meet certain eligibility requirements and are in good standing the option of refinancing their high-interest private student loans down to the rates offered to new federal student loan borrowers this year. Those who refinance will also have access to the benefits and protections of the federal student loan program. Participation is fully voluntary.
Ensure Pell Grants Keep Pace with Rising Costs
The RED Act ensures that Pell Grants keep up with rising costs by indexing the Pell Grant program to the Consumer Price Index (CPI) beyond 2017 with mandatory funding to protect and sustain its value into the future. Without permanent CPI indexing, the purchasing power of the Pell Grant will erode, making it harder for students and families to afford college. Specifically, this legislation:
- Indexes the Pell Grant to inflation, which would increase the maximum Pell Grant aware by $1,300 in the 2026-27 award year, resulting in larger awards for 9.2 million students throughout the country. [White House, 1/19/16]
- Helps millions of students from low-and-moderate-income families pursue higher education, as 73 percent of the 8.2 million Pell Grant recipients in 2015 had a total family income at or below $30,000. [Department of Education, 2/15]
- Helps make higher education more debt free for students of color, as more than 60% of African-American and half of Hispanic undergraduates rely on Pell grants to attend school. [TICAS, 3/13/15]