We’ve written before about the growing crisis in student loan debt, which has only grown worse and is now commanding a growing level of attention — from funders and policymakers.
Recently, Hillary Rodham Clinton, the front-runner for the Democratic presidential nomination in 2016, unveiled a $350 billion plan designed to help more Americans pay for college without becoming mired in the level of student loan debt that has forced many young Americans to postpone buying homes and starting families.
The level of student loan debt in the U.S. has exploded, topping more than $1.1 trillion. Meanwhile, the cost of higher education continues to rise. Tuition and fees at public colleges and universities have risen more than 40 percent (adjusting for inflation) in the past decade, according to some estimates.
With loan payments consuming a higher proportion of the college graduate incomes, a growing number may start considering the advice offered by Lee Siegel. In a recent op-ed in the New York Times titled “Why I Defaulted on My Student Loans,” Siegel describes how he defaulted on his student loans and suggests that many of today’s graduates may want to follow his example.
Clinton’s proposal would slash interest rates on student loans, create a fund to assist private colleges that target low-income students and students of color. The 10-year plan would be financed by closing a number of tax deductions that largely benefit affluent taxpayers.
The proposal may boost Clinton’s standing among progressive voters in the Democratic party and cut into the base of support for Sen. Bernie Sanders of Vermont, Clinton’s leading challenger for the Democratic presidential nomination. Sanders has offered his own prescription for higher education in the U.S., a proposal offering a free education at all public colleges and universities, a plan he wants to pay for by imposing a transaction tax on Wall Street trades.
Foundations whose funding strategies include higher education have been paying close attention to the student loan crisis as well. Funders have supported an array of organizations and programs designed to craft solutions to keep the problem from becoming the spark that ignites another financial crisis.
The Institute for College Access and Success (TICAS) is one of the largest nonprofits focused on the growing problem of student loan debt. It develops and advocates for policy changes designed to reduce student debt burdens. TICAS draws support from a range of funders, including the Ford, Gates, Lumina, Kresge, and Carnegie foundations.
Ford advocates for reducing student loan debt burdens as part of its Higher Education for Social Justice initiative, while Lumina has advocated greater financial support for low-income students as part of its overall goal to increase the proportion of college-educated Americans by the year 2025. Kresge and Gates have also supported multiple programs designed to increase access to higher education among traditionally underrepresented populations. Meanwhile, the Hewlett Foundation has been an important backer of Student Organizing, Inc., supporting its work on the problem of overpriced textbooks — another driver of student indebtedness.
While most of these funders have approached student loan debts and college affordability from a national perspective, other funders have employed more targeted approaches aimed at specific populations. The Conrad Hilton Foundation and the Lilly Endowment, for example, support efforts to reduce student loan debt for recent theological school graduates starting new careers in church ministry.
It's hard identify any grants supporting the specific idea of "debt-free college" in recent years. But a range of funders and individual donors have supported the policy groups promoting this idea. For example, Demos, which MSNBC called "the intellectual driving force behind the idea of debt-free college," receives backing from Ford, Kellogg, and other major foundations.
Whether any proposals aimed at reducing college costs or forgiving student debt loads become law is an open question. Congressional Republicans are almost certain to oppose any proposal that involves increasing taxes or boosting federal spending. What is clear is that the problem isn’t going away and will likely worsen before it gets better. This means there is a lot of room for creative ideas to make college more affordable and reduce the debt burden shouldered by millions of young graduates.