Fully-paid for In the Red Act strengthens Pell Grants, invests in community college, and enables more Americans to refinance their student debt at lower interest rates
Washington, DC–(ENEWSPF)–April 28, 2016. Congresswoman Tammy Duckworth (IL-08) today introduced a comprehensive package of fully paid-for reforms to make college more affordable for all Americans. The Congresswoman’s In the Red Act would help put our nation on a path toward debt-free college, increase the maximum Pell Grant to keep pace with skyrocketing costs, invest in our country’s community colleges, enable borrowers to refinance student debt at lower interest rates and increase accountability among colleges and universities to ensure students are receiving high-value degrees and credentials. Duckworth’s proposal is cosponsored by House Education and the Workforce Committee Ranking Member Bobby Scott (VA-03), Subcommittee on Higher Education Ranking Member Rubén Hinojosa (TX-15) and Congressman Joe Courtney (CT-02).
“I put myself through college with student loans, Pell Grants, and a heck of a lot of waitressing,” said Congresswoman Duckworth. “And I’m still paying off my student loans today—so I know how tough paying for school can be. But every day, an affordable education is growing further and further out of reach for middle-class families, limiting young Americans’ prospects for the future and threatening both our economic growth and global competitiveness. Our In the Red Act will make the common-sense reforms we need to make college more affordable—which should be one of our top priorities in this nation.”
“Higher education should be a path to prosperity, not a path into suffocating debt. But unfortunately, college costs and student loan debt are holding back an entire generation and creating a drag on economic growth for our country,” said Senator Tammy Baldwin.“The idea that the next generation will be able to go further and do better than the last one is the heart of the American dream. That is why I will fight for the commonsense solutions offered in the In The Red Act.”
Not only would the In the Red Act help reduce rising costs and make higher education more affordable, but those benefits would come at no cost to taxpayers. The legislation, which was introduced by Senator Tammy Baldwin (D-WI) in the Senate, is paid for by closing tax loopholes that only benefit special interests at the expense of everyday taxpayers. More information about these loopholes is available here.
“I have always believed that expanding accessibility and affordability in higher education transforms lives, increases America’s global competitiveness, and gives millions of Americans an opportunity to enter the middle class,” said Congressman Hinojosa. “However, today, too many Americans are struggling to access a college education due to rising college costs and inordinate amounts of student loan debt. As Ranking Member on the Higher Education and Workforce Training Subcommittee, I am proud to serve as an original cosponsor of the In the Red Act. This Act will put our nation on a path to debt-free college, strengthen Pell grants, enable more Americans to refinance their student loans at lower interest rates and increase accountability in higher education.”
“I am pleased to support Rep. Tammy Duckworth’s introduction of the In the Red Act, which will go a long way toward helping relieve the burden of college debt for America’s middle-class,” said Congressman Courtney.“We know that individuals with college degrees will earn substantially more than those without a degree throughout their lifetime, but the costs associated with getting that degree have put a college education out of reach for many young Americans. Rep. Duckworth’s comprehensive approach to making college more affordable, which includes my student loan bill, the Bank on Students Emergency Loan Refinancing Act, will help make college once again attainable for millions of Americans. I am proud to join Rep. Duckworth as an original cosponsor of her bill, and I intend to encourage my colleagues to support this critical piece of legislation.”
The comprehensive In the Red Act includes the following provisions to make college more affordable and help put us on the path to debt-free college:
Allow Borrowers to Refinance Student Loans at Lower Rates
The In The Red Act will allow student loan borrowers to refinance their outstanding student debt at lower interest rates, saving more than 24 million student loan borrowers billions of dollars in interest—roughly $1,896 each. The In The Red Act incorporates Congressman Joe Courtney’s Bank on Students Emergency Loan Refinancing Act and would allow students to refinance their student loans and take advantage of lower interest rates — the same way people refinance a mortgage, a car loan or business debt. This reform would give student loan borrowers the ability to refinance their debt at the same low rates offered to new borrowers in the student loan program in the 2013-2014 school year.
Strengthen Pell Grants to Keep Pace with Rising Costs
The In The Red Act will adjust Pell Grants for inflation, so they keep pace with rising costs and don’t continue losing value. This provision authored by the Higher Education Subcommittee Ranking Member Rubén Hinojosa would give 9.2 million students an additional $1,300 in grant funding to pay for college costs and prevent the purchasing power of Pell Grants from eroding and pushing higher education further out of reach for Pell Grant recipients.
Make A New Investment in Community College
By creating a new federal-state partnership to make two-year community colleges tuition-free, the In The Red Act provides a more affordable opportunity for students to gain the skills they need to succeed. This investment would help students earn an degree or learn other skills needed for their chosen careers without also being burdened by significant student debt. Through the inclusion of Committee on Education and the Workforce Ranking Member Bobby Scott’s America’s College Promise Act, the In The Red Act could save full-time community college students almost $4,000 in tuition each year.
Ensure Colleges Provide Students with High-Quality Degrees
The In The Red Act would help increase accountability for higher education institutions and create strong incentives that help protect students and ensure they are able to graduate with high-value degrees and credentials. States would need to take a number of steps including providing high-quality academic and occupational training programs and adopting institutional reforms and innovative practices that improve outcomes for students.
Close Special Interest Loopholes to Make College More Affordable
The In The Red Act would put this country on a fiscally-responsible path to debt-free college by closing tax loopholes that benefit special interests in order to pay for the legislation’s reforms. The In The Red Act includes Congressman Lloyd Doggett’s Stop Subsidizing Multimillion Dollar Corporate Bonuses Act to close a major loophole in current corporate tax law by preventing unlimited tax write-offs for performance-based executive pay. The legislation would also close the carried interest tax loophole for hedge fund managers, enact the “Buffett Rule” to ensure millionaires pay their fair share, close the stock options loophole, and incorporate Ways and Means Committee Ranking Member Sander Levin’sStop Corporate Inversions Act to prevent American companies from evading U.S. taxes.
Additional information about these college affordability reforms is available here.