Starbucks, in partnership with Arizona State University, made a bold announcement on June 17th that it would begin offering to pay the college tuition of its 135,000 U.S. employees. I was intrigued by the announcement because it aims to address an underlying issue plaguing our nation’s economic vitality: college affordability. The issue of the cost of a college education is a very serious one, and the following statistics make abundantly clear the dire need to make college more affordable:
- Seventy percent of college students nationwide are receiving some form of financial aid to pay for college.
- Since 2007, student debt has doubled to $1.2 trillion, surpassing credit card debt.
- Currently, 1 in 7 students default on their loans.
Millions of American graduates and their families are facing debilitating college debt as they look to launch a career, buy a house, get married, or save for retirement. These are big life decisions waylaid because college has become too costly. Millions more prospective college students are wondering if college is worth it at all.
Despite these astonishing numbers, a college education has never been more important. The unemployment rate for young Americans with a college degree is less than half the national average (at three percent), and the majority of new jobs in the next decade will require a college degree.
Making sure higher education is an opportunity for every student is an economic imperative for our nation.
After World War II, Congress enacted the Servicemen’s Readjustment Act of 1944, better known as the GI Bill of Rights. This law granted tuition payments to veterans who never would have been able to go beyond high school. Nearly 8 million veterans enrolled.
The federal government then did for civilians what it had done for veterans. It launched the National Defense Student Loan program to help families pay for college. Congress did more with the landmark Higher Education Act of 1965 to help expand college opportunity for women and minorities. American college education flourished. But since then declining federal investment in college education and two recessions have contributed to skyrocketing tuition and lower matriculation.
It’s time to reinvest in our economic future by addressing college affordability. Inaction can only lead to a lifetime drag on the U.S. economy.
I support the important executive action President Obama took recently to help millions of students refinance their college loans. Congress must also pass meaningful legislation to reaffirm his order.
Although the Senate failed to pass its version of a student loan refinancing bill, I’m proud to co-sponsor a similar bill in the House, which I’m working hard on to see that it becomes law.
The Bank on Students Emergency Loan Refinancing Act (H.R. 4582) enables students to refinance loans which were taken out before July 1, 2013. Congress passed legislation in 2013 that lowered interest rates for all types of student loans which had increased on July 1st, but it did not address loans taken out before that date.
Under H.R. 4582, all students with qualifying public or private loans will be eligible for refinancing at an interest rate available to first-time borrowers, which on average is half the interest rate they currently pay. This refinancing is done largely without cost because the loan program is entirely funded by eliminating tax loopholes and special tax breaks. The non-partisan Congressional Budget Office has estimated that this bill will actually save money in the long-term, decreasing the deficit by $21.7 billion over the next ten years.
To borrow from Winston Churchill, this isn’t “a riddle, wrapped in a mystery, inside an enigma.” It’s straightforward. This is about investing in our economic future and jumpstarting the forward-thinking policies America once smartly embraced.
Should you have any questions or comments, let me hear from you. I welcome them.