SCHUMER, STANDING WITH ST. JOHN’S STUDENTS ON STATEN ISLAND CAMPUS, TO PUSH NATIONWIDE CAMPAIGN TO REDUCE STUDENT DEBT; SENATOR SAYS ST. JOHN’S RALLY WILL BUILD MOMENTUM & INVOLVE STUDENTS FOR DEBT-FREE COLLEGE PUSH
Schumer Stands With Staten Island Students From St. John’s & Wagner to Push #InTheRed Campaign; National Plan Seeks to Galvanize Local Students Across New York City, New York State & Nation
Schumer Says Ever Increasing College Costs And Overwhelming Student Debt Will Make #InTheRed Debt-Free College Proposal A Dominant National Issue This Year
Schumer: When It Comes to College, The Only Red That St. John’s Students Should Remember Is That Of The Great ‘Red Storm’
During a visit to Staten Island, U.S. Senator Charles E. Schumer today pushed a legislative package to address the lack of college affordability. Schumer said the #InTheRed College Proposal will put America on a path to debt-free college. Schumer, surrounded by students from St. John’s University and Wagner College who are #InTheRed, released specific details about the legislation as well as highlighted some of the efforts he will be undertaking to bring further national attention to the student debt crisis – and the urgency for Congress to act to address it.
“In today’s super competitive and globally connected economy, a college education is a necessity, but it is being priced as a luxury – and it is breaking the bank for students and families across New York, including right here on Staten Island. With tuition costs continuing to rise, many students and their families are forced to take on higher levels of debt than ever before. This student debt is debilitating, it is a drag on our economy and it is a huge burden on the shoulders of millions of young Americans,” said Senator Schumer. “That’s why I am working hard with my fellow Senate Democrats to launch our campaign to make sure higher education doesn’t put students in the red, and we will make it our mission to make Congress act.”
Schumer continued, “I was honored to have Sean McAllister, a New Yorker and student at Syracuse University, join me as my State of the Union guest earlier this year, so we could begin to shed a light on the student debt crisis in this country. Sean works construction to pay for school, and still makes Dean’s List – and yet, like many college students across the U.S. he is in the red. This student loan debt is holding back millions of students’ ability to achieve the American Dream – so it’s long past time that we start off on the path towards making college debt free for every student in this country.”
“St. John’s University remains committed to providing a quality and affordable education for all of our students. The University has already and will continue to take innovative steps to ensure student success through the responsible stewardship of all of the resources of the University. St. John’s University supports any and all efforts to help reduce student debt,” said Conrado “Bobby” Gempesaw, Ph.D., President of St. John’s University.
Schumer explained that, over the last decade, college tuition costs have skyrocketed across the country, and more students in all income levels are being forced into borrowing from both federal and private lenders to finance a college education. As a result, students are borrowing in higher amounts than ever before. In fact, student loan debt now exceeds the amount Americans owe on credit cards and in auto loan debt. According to the Wall Street Journal, student loan debt in the U.S. has doubled since 2007 and has been propelled past the $1 trillion mark. According to a 2014 report from the Wall Street Journal, economists and academics have attributed student loan debt, in part, to hindering the ability to afford rent, potential home ownership and retirement savings among young people. This has in turn stifled economic growth following the housing crisis.
According to the Institute for College Access & Success (TICAS), over the last decade—from 2004 to 2014—the share of graduates with debt rose from 65 percent to 69 percent. In addition, the average debt at graduation rose at more than twice the rate of inflation. According to TICAS, in New York State alone, the average college graduate has $27,822 in student loan debt, and the proportion of New York college graduates with student loan debt is approximately 61 percent.
As a result, Schumer today joined St. John’s and Wagner students on Staten Island to discuss the legislation he is currently working on with Senate Democrats aimed at pushing Congress to address college affordability in 2016. Schumer said his effort is a part of the Senate Democrats’ new #InTheRed campaign, and has a goal of putting America on a path toward debt-free college. This legislative package, which was first announced at a press conference in the U.S. Capitol building with Senate Democrats and dozens of students and advocates, is currently comprised of three existing proposals that would make two years of community college free, address the significant loss in value of Pell Grants by adjusting them for inflation and allow borrowers to refinance their existing student loans at lower rates.
This legislative package – called the RED (Reducing Educational Debt) Act – contains three proposals that seek to:
Make Two Years of Community College Tuition-Free
Under the RED Act, a full-time community college student could save an average of $3,800 in tuition per year, and, if all states participated under this program, an estimated 9 million students throughout the country could benefit. The legislation would also hold colleges accountable by making a condition of the grant that training programs are tied to the skills needed in today's economy and that credits are transferable to four-year institutions. Specifically, this legislation:
- Creates a new partnership between the federal government and states to help them waive resident tuition in two years of community college programs for eligible students, while promoting key reforms to accelerate student success; and
- Provides a federal match of $3 for every $1 invested by the state to waive community college tuition and fees for eligible students before other financial aid is applied; and
- Ensures that academic programs are fully transferable to four-year institutions in their state, or occupational training that leads to credentials in an in-demand industry; and
- Maintains and encourages state funding for higher education; and
- Establishes a new grant program to provide pathways to success at Historically Black Colleges and Universities and Minority Serving Institutions by helping them cover a significant portion of tuition and fees for the first two years of attendance for low-income students.
Allow Borrowers to Refinance Student Loans at Lower Rates
Under the RED Act, student loan borrowers would be given a chance to refinance their debt at the same low rates offered to new borrowers in the federal student loan program in the 2013-2014 school year. Specifically, this legislation:
- Allows eligible student loan borrowers to refinance their federal loans. All eligible federal FFELP and Direct student loan borrowers could refinance their high-interest loans down to the rates offered to new federal borrowers in the 2013-2014 school year under the Bipartisan Student Loan Certainty Act.
- Allows eligible student loan borrowers to refinance their private loans into the federal program. The bill provides those who meet certain eligibility requirements and are in good standing the option of refinancing their high-interest private student loans down to the rates offered to new federal student loan borrowers this year. Those who refinance will also have access to the benefits and protections of the federal student loan program. Participation is fully voluntary.
Ensure Pell Grants Keep Pace with Rising Costs
The RED Act ensures that Pell Grants keep up with rising costs by indexing the Pell Grant program to the Consumer Price Index (CPI) beyond 2017 with mandatory funding to protect and sustain its value into the future. Without permanent CPI indexing, the purchasing power of the Pell Grant will erode, making it harder for students and families to afford college. Specifically, this legislation:
- Indexes the Pell Grant to inflation, which would increase the maximum Pell Grant award by $1,300 in the 2026-27 award year, resulting in larger awards for 9.2 million students throughout the country. [White House, 1/19/16]
- Helps millions of students from low-and-moderate-income families pursue higher education, as 73 percent of the 8.2 million Pell Grant recipients in 2015 had a total family income at or below $30,000. [Department of Education, 2/15]
- Helps make higher education more debt free for students of color, as more than 60% of African-American and half of Hispanic undergraduates rely on Pell grants to attend school. [TICAS, 3/13/15]
Schumer has long fought to pass education tax benefits and legislation aimed at making college more affordable for middle-class families struggling to keep up with the rising costs of tuition. In January, as a part of his continuing effort to give students a fair shot at obtaining an affordable college education, Schumer launched a statewide campaign to gather stories from students and parents and student loan debt holders across New York State that will inform and energize this national effort. Schumer said hearing from individual students, student loan debt holders and their families could help compel Congress to address the issue of college affordability. Schumer said finding ways to ensure students are not drowning in college debt would better allow them to contribute to the economy, as they would more easily be able to afford rent, buy homes, start small businesses, save for their retirement and purchase goods that contribute to the GDP, like cars and items for their new homes.
Schumer said he is working to build upon previous efforts to make college more affordable. In December 2015, Schumer announced that the Protecting Americans From Tax Hikes Act of 2015 – also known as the tax “extenders package” – made the Schumer-authored college tax credit a permanent part of the U.S. Tax Code. Schumer’s legislation, the American Opportunity Tax Credit (AOTC), which he helped pass into law initially in 2009, is available to families earning up to $180,000 per year and provides a tax credit of up to $2,500 per year, per eligible student. Families with students will now be eligible to save over $1 billion per year with this tax credit. The U.S. Office of Management and Budget estimated that the AOTC’s permanence would provide $15.2 billion in tax relief nationwide in 2015 to make college more affordable.
Last year, Schumer also helped pass a two-year extension of the Federal Perkins Loan program, through the Federal Perkins Loan Program Extension Act of 2015. Specifically, this legislation will allow current and new undergraduate borrowers to complete the 2017-18 academic year with the support of Perkins Loans. In addition, it will allow current graduate borrowers to complete the 2016-17 academic year with the support of Perkins Loans. Schumer said this is a step in the right direction and he will continue pushing to extend the Perkins program further and extend eligibility for new graduate students.