Schumer looks to combat college debt with RED Act

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On Feb. 11, U.S. Sen. Charles E. Schumer, a Democrat from New York, held a conference call with New York college newspapers to announce his plan to make college more affordable for students.

“In today’s uber-competitive and globally connected economy, a college education is a necessity but is being priced as a luxury,” Schumer said.

According to the senator, national student debt is above $1 trillion dollars. He commented that, “this student debt is debilitating, and it is a huge burden on the shoulders of millions of young Americans.”

He cited this debt as a major factor of restraining young adults from achieving the American dream. He recounted that during his time as student, most graduates left college without any debt.

He claimed, “(A college education) is breaking the bank for students and families across New York. College should create a lifetime of opportunities, not a life sentence of debt and financial strain.”

In his mind, it is long past time for America to start “making college debt free for every student in this country.”

Schumer is teaming up with Sen. Elizabeth Warren, from Massachusetts, and other Democratic senators to propose legislation to provide debt-free higher education, promising that they “will make it (their) mission to make Congress act.”

The legislation, called the Reducing Educational Debt Act, or RED Act for short, contains three major aspects.

The first is making two years of community college free. Schumer believes this will create new partnerships between the federal government and states to help make college more affordable. It would also help more students attend four-year programs, according to Schumer.

The second major aspect is allowing borrowers to refinance student loans at lower rates. Schumer asserted that it is a disgrace that major companies and banks receive lower interest rates than college students.

Finally, it would ensure Pell Grants keep pace with rising costs. This, he said, would help millions of students from lower-income backgrounds attend institutions of higher learning and would help make college debt-free for students of color.

Schumer noted that his proposal is different from the plan of presidential hopeful Sen. Bernie Sanders, a Democrat from Vermont. Schumer says he is trying to make college debt free, instead of tuition free.

He conceded that his proposed legislation could act as an integral step toward achieving Sanders’ vision of tuition-free college, however.

Chair of the Economics Department Tomas Dvorak, however, believes Schumer’s plan is far more realistic than Sanders’.

Dvorak said that extending financial aid to lower-income students and extending grants could yield desirable societal benefits.

“This is a good thing because making education affordable to students from low-income families can go a long way in reducing income inequality. This has always been a part of U.S. higher education,” Dvorak said.

He thinks Schumer wants to keep federal and state grants increasing in parallel with inflation. He agreed with Schumer that action needed to be taken to “maintain the current real value of the subsidy.”

Dvorak disagreed with Schumer’s statement that a debt-free program would not just be good for students, “but the future of the nation” because it would increase future consumer spending and buying due to lower loan rates and smaller debts.

Dvorak said, “I don’t buy the argument that debt-free students will help the economy because they will buy houses and cars. If we tax people more to reduce college students’ debt, then those who pay the higher taxes will buy fewer houses and cars. The money to pay for your college has to come from somewhere.”

He elaborated, “The way education subsidies help the economy is through higher productivity of the better educated workforce. Therefore, it makes economic sense to subsidize education particularly for those are not able to afford it, or are reluctant to borrow.”

Previous legislation for making college more affordable has been proposed in years past, but quickly died in Congress due to a lack of political and public support.

Schumer promised to “do things a bit differently this time.”

Schumer has created a new campaign, called #InTheRed, that he hopes will be able to “push Congress to address affordability now in 2016.”

Schumer believes he can rally Republican support by encouraging the voices of college students to be heard by Congress.

“Senators will be traveling to their home states and will be holding roundtable discussions with college students,” Schumer explained.

Schumer encouraged all college students to write, email, blog, call or tweet their representatives, using the hashtag #InTheRed, and state how they feel about the debt a large proportion of them will be taking on after graduation.

He and his colleagues want students to play an active role in helping pass this new legislation. He believes the voice of students can make all the difference and cited the anti-war efforts during the Vietnam War as a prime example of this.

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