In the latest issue of the Washington Monthly, Steven Waldman recounts the history of “pay-as-you-can” student loans from the infancy of the idea in Bill Clinton’s 1992 presidential campaign to its fulfillment during Obama’s presidency.
It’s largely forgotten that Clinton coupled income-contingent college loans to his national service proposals, but the idea was that college debt shouldn’t dissuade people from taking lower paying jobs in the service of the country.
Clinton was able to create AmeriCorps and get some statutory authority to pursue income-contingent loans, but divisions within the education community and his own coalition prevented him from getting very far.
Flash-forward to Obama. A combination of new legislative authority (including some signed into law by George W. Bush) and more aggressive action by Obama has made the income-based repayment plans start to flower. The volume of income-based loans more than doubled from 2013 to 2014, to $102 billion in loan volume, according to the Chronicle of Higher Education.
It’s still overly complex, and there are several variants of the approach, but the key is that borrowers don’t have to pay more than 10 percent of their income. And if they are still paying after twenty years, the remaining debt would be wiped out. What’s more, if they work in government or some nonprofit jobs, the remaining debt would be wiped out after ten years.
Income-based loans don’t just help the Ivy Leaguer who wants to try Teach for America. They are also ideal for a forty-year-old parent who has decided to work part time to take care of his kids and therefore has less income to pay back loans—or a working-class student who took on debt going to school at night only to find that the customer service job he wanted has been outsourced to India. It helps not only those who choose public service but also those who struggle for reasons of global economics, family raising, or bad luck.
Implicit in all of this is a fairly radical principle: If you have tried for twenty years to make a solid income and still can’t, we’re going to give you a retroactive subsidy. Until now, financial aid was based on the income of the parents or student at the time of schooling. Under this system, a judgment about a subsidy will occur a second time, at the end of twenty years.
It’s a good policy change and it’s flown mainly below the radar. In the end, it will be an important and positive part of President Obama’s legacy.
Why not make college free for all? Especially since thanks to scum like Piyush, and the goggle-eyed homunculus hired by Koch Industries to run their Midwest subsidiary formerly known as the state of Wisconsin, want to make college unaffordable to all but the rich.
why doesn’t a psychic give me the lotto-winning numbers?
It would cost $20 billion. What is that, 20 jets?
“They” believe the early 19th century in the US was swell in all ways.
Very, very exciting!!
You know what’s even a better policy – free higher education. This used to be a bi-partisan issue back in days before we were overcome by selfish grifters.
Today’s state of affairs sickens me. Pardon me while go out and find a republican to punch.
When was higher education ever free?
In 1960 California’s Donahoe Act provided tuition free education via a Master Plan: “The doors of the University of California were thrown open, tuition-free, for the top 12.5 percent of high school graduates. The top 33.3 percent could find a place in one of the California State Universities, which were also tuition-free.”
http://www.dissentmagazine.org/article/from-master-plan-to-no-plan-the-slow-death-of-public-higher-e
ducation
See also: http://www.ucop.edu/acadinit/mastplan/mpsummary.htm
This is the environment I grew up in, one where the lessons of shared sacrifice from the Depression and the War linked America together. My parents and grandparents understood the strength and wisdom of collective action. They had seen first hand what we could overcome when we stuck together and watched out for each other.
We went from:
“My fellow Americans, ask not what your country can do for you, ask what you can do for your country.”
To: “What’s in it for me?”
Or maybe I am just having a bad day…
No tuition ever (long before the Master Plan) at UC until 1970, only fees. The top 12.5% of students aren’t guaranteed admission, only guaranteed consideration, and as always those that are still have to come up with the not inconsiderable amounts for fees, books, room and board.
A brief history of US college loan/grants programs.
Wonder if we have been asking the right questions for the past sixty odd years? It all did seem to work up until the late 1960s/early 1970s for white people. But perhaps some of that “working” was illusory. A culmination of all the various and disparate programs instituted over the prior thirty/forty years before more honest efforts to expand educational opportunities to all and the negative forces began to build steam.
Too much to talk about in a comment other than to point out that the problems/issues with college loans and college debt are a symptom of poorly deployed public educational dollars and privatization of schools and school loan.
I’m glad the Obama Adminstration is using its power to push through changes regarding this issue which we hadn’t experienced before from the Federal government. These changes are valuable.
I think you are on to something Marie, the system did work for white people. The peak of the Civil Rights movement in the 60s coincided with the backsliding in education. We can’t have our money going to to help “those” people now can we? It’s a theme that we see time after time again today…the southern strategy at work.