Higher Education Policy
- Nearly 45 million Americans are struggling to pay back loans to the tune of a combined 1.7 trillion dollars.
- The volume of student loan debt is greater than any other form of debt in the United States, more so than even credit card debt.
- 45% default rate expected when moratorium is lifted.
All the following are in constant (2021) dollars:
- In 2020-2021 dollars, one year's college tuition in 1963 cost just over $4,300. In 2020, it cost nearly $14,000.
- The total cost of a year of college was about $10,600 in 1963. In 2020, it was almost $26,000.
- Across all types of schools, the cost of college has increased more than 143%, or 2.4 times, between 1963 and 2020.
- Compared to other school types, four-year public colleges saw the steepest price hikes from 2000-2020, jumping from roughly $13,000 a year to over $21,000 annually.
- Attending a four-year public college costs 64% more than it did 20 years ago.
- Attending a two-year public college costs 59% more than it did 20 years ago.
- Across all schools, tuition spikes are driving increases in the overall cost of college.
- From 2000-2020, average tuition and fees rose by 69%, from $8,082 to $13,677 a year.
Addressing student debt
Make college debt dischargeable in bankruptcy
In the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, Congress made student debt non-dischargeable in bankruptcy. That put student debt in a different category from medical debt or credit card debt, making it inescapable and sentencing millions of young people to an entire lifetime of debt servitude.
One of the main champions of this legislation in Congress was Joe Biden. Wall Street had been clamoring for bankruptcy “reform” for many years. Corporations use bankruptcy frequently as a financial maneuver to get out of bad investments, but the Act made that impossible for many consumers, especially student debtors.
Article 1, Section 8, Clause 4 of the United States Constitution calls for uniform bankruptcy laws. In a tradition going back to Solonic Athens, democratic societies have recognized that inescapable debt erodes the very foundation of democracy. That’s why the principle of uniform bankruptcy laws was written into the US Constitution.
People should not be on the hook for a lifetime for a choice they made when they were 18 or 20 years old, a choice that was forced upon them by exorbitant higher education costs. As President, RFK Jr. will propose legislation to Congress to repeal the unfair provisions of the Act and replace it with genuine protection for indebted consumers.
Allow refinancing of student loans
You might find it hard to believe that it is illegal to refinance student loans. Unlike most other forms of debt, a debtor cannot, for example, borrow against their home in order to pay off their loans. The free market is not allowed to operate – to the detriment of the debtor and to the benefit of the creditor.
Allowing students to refinance their student loans at lower interest rates gives them a chance to get a handle on monthly payments. If businesses can refinance loan debt, so should students. It’s time to treat college loans debt like other debts, with multiple options of paying them off.
Abolish interest on student loans
In the 2021-2022 Congress, Rep. Eric Salwell introduced the No Student Loan Interest Act, which would abolish interest on new and existing student loans. Unfortunately, the bill went nowhere.
The effect of the bill would be enormous relief to debtors. Since the interest would be cut to zero retroactively, millions of borrowers would be immediately debt-free. Millions more would see their balances and monthly payments shrink dramatically.
Robert F. Kennedy, Jr. will lobby Congress to pass legislation along the lines of Salwell’s bill. He will also explore other ways to achieve the same result. Currently, lenders are anticipating a massive wave of student loan defaults. Undoubtedly, lenders will clamor for bailouts. If these happen, let’s have a debtors’ bailout rather than a creditors’ bailout. That means that if the Treasury or Federal Reserve purchases distressed student loan assets, they will cut the interest rate to zero.
Make schools, rather than loan institutions, responsible for defaults
Today the higher education system is trapped in a vicious circle, where rising tuition forces students to take out loans, and the ready availability of loans encourages universities to raise tuition. One reason they can do this is that it is the lending institutions that are on the hook in case of default, not the schools. There is therefore no incentive for universities to keep tuition costs under control. Furthermore, if colleges and universities were on the hook for the debts that students incurred, they’d be more careful to lend to serious students who are likely to graduate.
In 1940, about 4 million Americans held 4-year college degrees. Today it is over 100 million, a ten-fold increase relative to total population. But this does not mean that everyone is smarter and better qualified for occupations requiring high levels of training.
Approximately 41 percent of all recent graduates are working jobs that do not require a college degree. College degrees are now required for many jobs that once only required a high school diploma. Some 17 percent of hotel clerks and 23.5 percent of amusement park attendants hold 4-year degrees.
The result of herding masses of students through an educational model originally designed to train scholars and intellectuals has not been to raise a nation of scholars, but rather to debase the quality of education. This is the phenomenon of “degree inflation.”
As the quality of higher education has declined, the value of a college degree in the job market has followed suit despite its skyrocketing cost. We will address this situation in several ways:
1. Qualify micro-credential and nano-credentials for Title IV funding.
Students who don’t want an entire 2-year or 4-year program will have access to the same support as traditional students.
2. Elevate the Trades
We need to expand the concept of higher education to include the trades. Electricians, plumbers, mechanics, builders, paralegals, and technicians of all kinds are just as important to America’s prosperity as the laptop class. Maybe more important. They are what keep America working.
Young people who want to pursue a hands-on career should get just as much support as those who want to become academics and professionals. As President, RFK Jr. will make sure that any funding for degree problems applies equally to trade schools. Cost to society will be much lower, as these trainings typically take a year or less.
3. The Domestic Peace Corps
College isn’t for everyone, but many people enter an academic institution because there are few other pathways into adulthood, where one can gain skills, experience, and socialization away from home. The military is one such pathway, but there are many other kinds of service that our country needs right now.
That is why RFK Jr. is going to redesign and vastly expand the concept of the Peace Corps to include a domestic service corps open to anyone who has graduated from high school. Young people will be able to learn skills as they do meaningful work. The work may include ecological restoration, infrastructure repair, care for the sick and elderly, assistance in the schools, helping the disabled, and many other areas of service. College isn’t for everyone, but many people enter an academic institution because there are few other pathways into adulthood, where one can gain skills, experience, and socialization away from home. The military is one such pathway, but there are many other kinds of service that our country needs right now.