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Warren’s student debt relief program would have big impact in N.H.

  • Democratic presidential candidate Sen. Elizabeth Warren, D-Mass. visits Keene State College during a campaign visit on Saturday, April 20, 2019 in Keene, N.H. Warren told the audience that she has pressed Congress to take up articles of impeachment against President Donald Trump. (Kristopher Radder/The Brattleboro Reformer via AP)

Monitor staff
Published: 4/22/2019 10:08:51 PM
Modified: 4/22/2019 10:08:47 PM

Vying for votes in the state with the fourth highest student debt loads in the country, Sen. Elizabeth Warren threw out a $1.25 trillion offer Monday: forgiveness.

The Massachusetts senator and Democratic presidential candidate unveiled a plan to relieve up to $50,000 of loan debt for those in households making $100,000 or less – a policy Warren said would benefit 42 million Americans.

Those $50,000 per-person write-offs – which Warren said would be instant – would be tapered down for those making over $100,000, up to the $250,000 level, when it would be cut off. The proposal also included a promise to eliminate tuition and fees for public two-year and four-year colleges, a $100 billion infusion into the Pell grant system, and increased funds.

Funding the plan, at $1.25 trillion over ten years, is Warren’s proposed 2% tax on those making over $50 million and 3% tax on those making over a billion dollars, the campaign announced.

It was an expansive policy proposal designed to break through noise, and it invigorated both left-leaning Democrats, who quickly praised it, and conservatives who decried it as an unwieldy stunt.

But in the state’s first primary state amid a crowded field, Warren’s gamble could have special resonance.

74% of New Hampshire past and present students have taken on debt, the highest proportion in the country, according to a 2018 estimate by the Institute for College Access & Success. And those who take on debt in the state have the fourth highest levels in the U.S: an average of $34,415 per student.

Adequately, diagnosing how the Granite State got there can be headspinning. According to policy analysts, it’s a unwieldy mix of state funding clawbacks, profligate university spending, spiraling tuition, and insufficient federal grant provisions.

On Tuesday, New Hampshire and nationally-based student debt experts gave differing reactions to Warren’s plan. Most praised the move, but some said loan forgiveness alone was not a panacea to higher education reform.

Tori Berube, vice president of college planning and community engagement at the New Hampshire Higher Education Assistance Foundation, a group that runs loan education for prospective college students, praised the relief, saying it would especially help recent graduates with low incomes but high debt loads.

“Here’s the thing: I don’t think kids starting out in New Hampshire are making $100,000, so any type of student loan debt forgiveness program that helps younger graduates or recent graduates I think would be beneficial,” Berube said.

But she added that she would want to know more details before offering her full support. “This does not say ... whether there’s a whole lot of details as to which students would qualify or how they would qualify.”

Jessica Thompson, director of policy and planning at Institute for College Access & Success, said the loan repayment could be a boon to many Americans, particularly the ones that take out loans but don’t graduate and find themselves shut out from higher paying professions that could make paying off loans easier.

“In terms of the forgiveness piece, it is pretty sweeping,” said Thompson. “It absolutely would help many, many people and it would be inclusive of the people that are truly struggling the most and are in crisis.”

To Thompson, student loan relief should be seen more as an economic stimulus for college graduates and non graduates than as a broader fix to higher education inequities.

That’s because while emphasis often lands on the “back-end” of the problem – the overbearing loan debt that trails graduates – more effective solutions can be found in addressing the front end: the cost to education to begin with.

That requires a greater emphasis on increasing financial aid through grant funding than necessarily tackling debt, Thompson said. And it means improving the existing federal program to help those struggling with their debt: income-driven repayment plans that can help students lower debt payments or eliminate it after 20-25 years. Those programs, while widely available, are often not well advertised to the people who could use them, leading to ongoing debt crunches Thompson said.

It’s a view shared by Kenneth Ferreira, the present of the New Hampshire Association of Student Financial Aid Administrators. To Ferreira, higher state investments into the university system and greater federal support of Pell grants, such as Warren’s proposed $100 billion infusion would be more worthwhile long-term fixes. Pell Grants have not even risen with inflation in recent years, let alone at levels that address rising non-tuition costs of university, Ferreira said.

“While I do think that any type of broad-based loan forgiveness program would certainly benefit students depending on the details – and I have lots of questions on what those details are ... but the root of that issue is really because middle class families aren’t growing,” Ferreira said. “It’s really because there hasn’t been an investment in Pell Grants. It’ really because colleges and universities should be held to some type of aggressive cost containment as part of their agreement to participate in administering federal funds.”

For Warren though, despite the complexities, the debt relief is paramount.

“The time for half-measures is over,” Warren said. “My broad cancellation plan is a real solution to our student debt crisis. It helps millions of families and removes a weight that’s holding back our economy.”

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