Bernie Sanders' College Tuition Proposal is a Nightmare for Student Loan Companies

May 18th 2015

On Tuesday, Sen. Bernie Sanders (D-Vt.) is poised to introduce a bill that would make public four-year college tuition-free in the U.S. He addressed a question about the bill in a Reddit AMA (ask me anything) -- and what it would mean for students who already graduated from college with crippling student loan debt.

"Our legislation not only would make tuition free at public colleges and universities, it would also cut student debt in half," Sanders wrote on Reddit. "It is absurd that millions of college graduates today are carrying debts of $50,000, $60,000, $100,000 or more. Our legislation deals with the issue of student debt in a very significant way."

The 2016 presidential candidate announced the bill in a statement on Sunday."We live in a highly competitive global economy and, if our economy is to be strong, we need the best-educated workforce in the world," Sanders said according to Bloomberg. "That will not happen if, every year, hundreds of thousands of bright young people cannot afford to go to college, and if millions more leave school deeply in debt."

Sanders votes as an Independent in the Senate, but is running for president as a Democrat -- against former Secretary of State Hillary Clinton. He plans to model the tuition-free college after European nations that provide low-cost or free higher education.

"Countries like Germany, Denmark, Sweden and many more are providing free or inexpensive higher education for their young people," the Senator said in the statement. "They understand how important it is to be investing in their youth. We should be doing the same."

The sentiment is similar to remarks he made at American University back in April of 2015, where Sanders noted that the cost of tuition has jumped over 50 percent throughout the last decade, and that high cost along with its corresponding student debt burden is holding back the middle class.

“We once led the world in the percentage of our people with a college degree, now we are in 12th place.” Sanders stated at American. “We are competing with other nations, including Austria, Germany, Denmark, Finland, Norway and Sweden, where college is free.”

The rising cost of college

The price of public college continues to rise. Yet some states like Louisiana, California and Wisconsin have proposed or enacted major cuts to public higher education. At a federal level, the proposed Republican budget would call for major reductions in methods of funding tuition for middle- and low- income students -- Pell grants and Stafford loans -- and would slash programs that would make debt repayment easier for those with student loans.

Student loan debt plagues around 40 million Americans, and there is no relief -- in spite some Senators' efforts to pass the Bank on Students Emergency Loan Refinancing Act, which would allow student loan debt holders to refinance at better interest rates.

Several months ago, ATTN: spoke to an expert about how countries like Germany can afford to provide cost-free higher education.

The 2016 election

Bernie Sanders has been an outspoken advocate for students: he has consistently focused onstudent loan debt and the importance of making higher education affordable to everyone.

“We have a crisis in this country," Sanders said in his American University speech. "Too many of our young people cannot afford a college education and those who do go to college are faced with crushing debt. Higher education must be available to all Americans who have the desire and ability. This is enormously important if we are to rebuild our middle class, and if we are going to be competitive in the global economy.”

In Democratic landscape of the 2016 presidential election, Sanders' legislation forces Hillary Clinton to release her own robust higher education plan. The publication Inside Higher Ed praised Clinton's 2008 election plan as "by far the most detailed plan released by a candidate yet." Among other things, Clinton's 2008 plan included increased funding for Pell grants and giving $10,000 grants for students who perform a year of public service.

Clinton also praised President Obama's plan for tuition-free community college, however she has not yet made a statement about tuition-free four-year college. (Though Bloomberg Politics reports that her campaign manager used the phrase "debt-free college" a few weeks ago.)

Read more about where all of the candidates --Bernie Sanders, Marco Rubio, Hillary Clinton, Rand Paul, Ben Carson, Carly Fiorina and Ted Cruz -- stand on higher education.

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