If people still associate “Clintonism” with small, narrow, incremental proposals that offer more bark than bite, then the college affordability initiative she unveiled today in New Hampshire isn’t very “Clontonian.” She actually went pretty big with a $350 billion (over ten years) package of proposals aimed at making loans unnecessary for students attending in-state public colleges, while reducing interest rates on existing student loans, and also expanding the AmeriCorps program both as a source of additional student aid and as a good post-graduate occupation. It is in some respects more comprehensive than earlier proposals by Democratic rivals Bernie Sanders and Martin O’Malley, and obviously on a different planet from the sparse colllege cost initiatives Republican presidential candidates have been offering
As WaMo’s higher education advisor Robert Kelchen of Seton Hall University notes at his own site today, HRC’s plan doesn’t aim at entirely eliminate student debt, but does, unlike some “debt-free college” proposals, provide some relief for students and graduates of private non-profit colleges. And then there’s this wrinkle:
This plan includes a federal/state partnership, which is typical for Democratic higher education proposals (and a good way to keep the price tag down somewhat). However, as suggested by Medicaid, many Republican governors may not take up the extra funds in exchange for having to assume additional responsibilities. For that reason, Sen. Clinton’s proposal to allow public colleges in those states to bypass the state governments to work directly with the federal government is politically brilliant. But states probably won’t be happy.
And states may not put up the necessary money to make the whole thing work, either, though there is some bipartisan pressure at the state level these days to reverse some of the state appropriations cuts made during and after the recession.
But existing debt is a big part of Clinton’s initiative:
Much of the price tag will go to reduce interest rates on student loans, both for current students and to allow former students to refinance their loans. This is a big deal for the Elizabeth Warren faction of the Democratic Party—the folks who really make their voices heard in primary elections. But this money will do little to improve access and completion rates, in part because much of the money goes to students after they have left college and because income-based repayment plans make interest rates less relevant. Additionally, students who tried to avoid debt as much as possible (many from lower-income families) won’t benefit as much and may be upset by the subsidies going to higher-income borrowers.
Well, inevitably any college affordability program could be resented by those who made sacrifices to avoid debt or have already paid off the debt. And for that matter, people who didn’t go to and/ or don’t plan to attend college could resent it, too. So for all the inherently microeconomic nature of such proposals, it will be important for Clinton and other progressives to remember the macroeconomic case for keeping college affordable and debt burdens reasonable.