Hillary Rodham Clinton's plan to make college more affordable and ease the burden of student debt could easily end up costing more than her proposed $350 billion.
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Clinton's plan essentially shifts more of the financial burden of college from students and their families to taxpayers. Much of the $350 billion she wants to spend over 10 years would help provide debt-free tuition at public colleges, but many students would still be on the hook for food and housing.
And for the plan to generate all the economic benefits it envisions, the reforms would need to both reduce the rising costs of higher education while increasing graduation rates.
Each challenge reflects the difficulty of transforming a higher-education system increasingly dependent on personal debt.
The amount of outstanding educational loans has nearly tripled over the past decade to $1.3 trillion, a reflection of the rising costs of college, an economy where more entry level jobs require undergraduate degrees and relatively stagnant personal incomes that have made it difficult for parents to save for their children's education.
Clinton sees a decline in state government support as driving that surge in student debt. Her plan would use federal incentives to ensure state colleges charge reasonable tuitions that students could afford without taking on debt. It would also allow students to repay their student debt at lower rates than today and limit payments to a share of their income, while forgiving any lingering balance after 20 years.
"We will make sure that costs won't be a barrier," the Democratic presidential candidate said Monday. "And we will make sure the federal government and states step up to help pay the cost, so the burden doesn't fall on families alone."
But more than half of the average $18,943 sticker price at a four-year public university is room and board, according to the College Board. While the Clinton plan would make Pell Grants eligible to pay for such expenses, the average grant of $2,435 isn't enough to cover all those costs.
That means some students, and their families, are still likely to need to take on debt to go to college.
By attempting to contain college costs primarily at public institutions, Clinton's plan could also put taxpayers at the state and federal level on the hook for more than $350 billion. Enticed by the prospect of debt-free tuition, students who once would have attended a private school could opt instead for a state university or community college.
"This proposal will likely increase the numbers of students enrolled in public institutions substantially — people consume more of pretty much anything when the price to them is reduced," said Monica Herk, vice president of education research at the Committee for Economic Development, a Washington-based think tank.
This influx of students would potentially require the state and federal government to dramatically increase their funding for state schools, pushing the plan's price tag upward.
Clinton argues that her proposal would increase the number of people completing college, and because college graduates earn more on average than those with only a high school diploma and are less likely to be unemployed, this would translate into a boost in overall economic growth.
Those higher incomes also lead to increased tax revenues, said Carmel Martin, executive vice president of policy at the Center for American Progress, a liberal think tank with links to the Clinton campaign.
That's money that could potentially be used to pay for the increased costs of more students attending public schools. But for the broader economic benefits to accrue, the Clinton plan would also need to increase graduation rates.
Less than 60 percent of college students complete a degree within six years — and without a degree they would lack the income to provide the additional economic gains Clinton is banking on.
The Clinton campaign has pledged to raise graduation rates, but education experts said the proposal fails to address poverty and other factors beyond cost and debt that also affect students' ability to complete a degree.
Without a higher graduation rate, the proposal "steers $140 billion to zero-return investments," notes an analysis by the American Action Forum, a conservative group. "There is no actual policy within the plan" to raise graduation rates, the analysis said.
And even if graduation rates improved, the plan lacks a mechanism to direct more students into lucrative majors. There is a $3.4 million gap in lifetime earnings between the highest- and lowest-paying college majors, which is three times larger than the gap in lifetime wage of college and high school graduates, according to a 2015 report by the Georgetown University Center on Education and the Workforce.
Yet federal financial aid treats all majors as equal. The consequence is that people pursue degrees with modest economic returns for themselves and society, said Diana Furchtgott-Roth, co-author of "Disinherited: How Washington is Betraying America's Young" and an economist at the center-right Manhattan Institute for Policy Research.
"The program that Hillary Clinton is proposing is well-intentioned," she said, "but it's not addressing the fundamental problems in higher education."
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