With skyrocketing tuitions, the current system of taking out loans to pay for college just isn’t working anymore. Students are borrowing twice as much money to pay for college than they did in 2000, and graduating with debt that prevents them from saving and investing for the future. Almost half of those with student debt are either in default or behind on their loans.
We can fix this broken system by creating a #ZeroDebt movement to replace college loans with grants and scholarships. Seventy-six college campuses across the country have already adopted partial or full no-loan policies, including 31 public universities. Seventy-six percent of Massachusetts voters support solutions that replace loans with grants and even more (82%) support creating zero-debt public colleges.
Together, we can push our legislators to fund zero-debt college, eliminate existing student debt, protect student rights, and create the #ZeroDebt system we need.
Here’s our plan:
Fund Zero-Debt College
It is time to re-invest in quality higher education and stop passing the cost of college to students and families by demanding that they borrow increasingly larger amounts to finance an increasingly expansive college degree. Research shows that zero debt colleges results in greater socioeconomic diversity at both public and private colleges, increases degree completion, and benefits the overall economy. We support several methods of funding zero-debt college in Massachusetts:
Create Zero-Debt Public College in MA: State disinvestment in higher education has resulted in unprecedented tuition hikes which are increasingly financed by students and families taking on larger amounts of debt. We support proposals to move Massachusetts’ public colleges and universities (the UMass system, state universities, and community colleges) to a zero-debt system where students are given grants and scholarships, not loans, to meet the cost of college. A recent poll of Massachusetts voters found that 82% support creating zero-debt public colleges.
Legislation: An act to guarantee debt-free public higher education (HD.3113/SD.1415); Proposal for a legislative amendment to the Constitution to provide resources for education and transportation through an additional tax on incomes in excess of one million dollars [the Fair Share Amendment] (HD.3300/SD.1709)
Renew the Endowment Incentive Fund: The Endowment Incentive Fund was a state program designed “to encourage private fund raising by the state university and public colleges.” To do so, the state authorized a matching ratio of 1-to-2, which was capped at $50 million for the five-campus UMass system, $5 million per institution for state universities, and $1 million each for community colleges. Further, the state stipulated that only those private contributions made in support of academic purposes—such as scholarships and endowed chairs—would be eligible for government matches. We support re-appropriating funding for this program as a way to encourage donations to the public college system that can be used for scholarships.
Legislation: An Act relative to the endowment match program (HD.3936/SD.1386)
Reform the MA No Interest Loan Program: The Massachusetts No Interest Loan (NIL) program was created to provide needy Massachusetts residents attending (mostly private) colleges in Massachusetts with a state-funded loan. The NIL program offers zero interest loans to assist students in meeting educational costs, but with more than half of the borrowers in default and the amount of money available to issue new loans steadily declining, it is clear that NIL is failing at its mandate to provide educational opportunity to needy Massachusetts residents. We support reforming this program from one that lends to students to one that lends to the colleges themselves, with the colleges then providing grants and scholarships to eligible students. This would not only take the financial risk away from vulnerable students, but would also increase colleges’ accountability for providing quality education and them move towards a zero-debt system.
Eliminate Existing Student Debt
The burden of existing student debt is causing lasting financial harm to far too many Massachusetts residents by preventing them from saving and investing for the future, and by harming their credit scores. Student debt can prevent young people from living independently, buying a home, choosing a dream career, and more. It’s a major drag on our economy. We support several policies that help eliminate existing student debt and relieve this financial burden:
Promote and Create Loan Forgiveness Programs: Federal student loan borrowers are entitled to several programs that allow borrowers to lower their monthly payments or have their loans forgiven after a set period of time. We support initiatives that increase awareness about these programs and help borrowers apply to them. We also support providing additional state-funded loan forgiveness options for people in careers most affected by the burden of student debt.
Legislation: An Act establishing a commission to study student loan debt relief programs (HD.937)
Create Business Tax Credits for Student Loan Payments: Some businesses have begun offering loan-repayment benefits to their employees, often as a matching program like a 401-K. A state tax credit could encourage more businesses to offer this benefit.
Legislation: An Act encouraging employer student loan repayment (SD.90); An Act Relative to Employer Student Loan Contribution (HD.1005)
End Professional Penalties for Borrowers in Default: Existing state law requires state licensing boards to deny issuing professional certificates, occupational certificates, registrations, and licenses if they are notified that the applicant is a borrower in default. This is not only unnecessarily punitive, but it is also counterproductive, possibly keeping new graduates from getting the job they need to repay their loans and get out of default. We support ending this unjust requirement immediately.
Legislation: An Act to prevent bureaucratic overreach in the collection of student debt (SD.390)
Protect Student Rights
As we work to move to a zero-debt system that replaces loans with grants and scholarships, we support policies that protect student rights and improve the transparency of the college finance system:
Require Transparency in College Pricing and Financial Aid: To make informed decisions on the return of a college degree, it is imperative that prospective students and their families have access to clear and straightforward information on the costs of attending college and the types of financial aid offered to them. We support legislation that would require colleges to provide clear and transparent information on their cost of attendance and on the financial aid they provide to admitted students.
Legislation: An Act requiring institutions of higher education to provide uniform financial aid information to accepted applicants (HD.3938/SD.1410)
Create a Student Loan Bill of Rights: Too many student loan borrowers experience difficulties with their student loan servicers — the companies responsible for sending bills and making sure payments are properly processed. We need to ensure that borrowers are protected when servicers mistakes lead to errors on credit reports, late fees, penalties, and other headaches for borrowers. We support legislation that provides a set of basic rights for all student loan borrowers, requires student loan servicers to be licensed by the state, and establishes a student loan ombudsman to monitor servicers and protect borrowers.
Legislation: An Act establishing a student loan bill of rights (HD.857/SD.1009)
Encourage College Savings
Even with a zero-debt college system that gives students access to affordable college with grants and scholarships, college students will still need money for living expenses. Students from low-income backgrounds often struggle with these expenses in college because they cannot count on family members to pay for their basic needs. We support policies that help support low-income students with saving for college:
Create universal and progressively matched Children’s Savings Accounts (CSA): CSA programs give every child a college savings account with incentives, such as initial seed deposits or savings matches. Research shows that these accounts are a highly effective tool to promoting financial security in low- and moderate-income families, and even more importantly, raising the hopes and aspirations for the future of children and their parents. Children with college savings of as little as $1-499 are three times more likely to attend college and four times more likely to graduate. Children with college savings have greater college expectations and are more likely to see themselves as college-bound. We support policies that improve access to universal progressively matched children’s savings accounts.
Fund Baby Bonds: Researchers and policymakers have proposed taking children’s savings accounts a step further by giving children a large sum of money at birth and then each year from birth until age 18, with higher amounts of money for children from lower-income families. Such a program would help correct the enormous wealth imbalance our society faces and help ensure that all children have the same ability to afford college.