Schumer to introduce student debt relief legislation

Sen. Chuck Schumer is leading new legislation that aims to ease the financial burden for college students and graduates. The Reducing Educational Debt Act—RED Act—would make two years of community college tuition-free, allow debtors to refinance student loans at lower rates and make sure that Pell Grants keep up with rising undergraduate costs. The ultimate goal of this legislation is to make undergraduate college a “debt-free” endeavor.

Schumer outlined his plan during a conference call with New York college newspapers on Thursday Feb. 11. “When I hear the amount of debt that some of our students have, it just makes me both sad and angry because it’s just such a burden at a time of your life when you should be free and unfettered,” he said. “I’ve spoken to so many who say they’re changing so many of their plans—what job they’ll do, when they get married, where they’ll live—because of the burden of debt.”

Schumer acknowledged that the first aspect of the RED Act—making two years of community college tuition-free—is not dissimilar to presidential candidate Sen. Bernie Sanders’ plan to make all college tuition-free, but noted some differences. “Tuition-free is a wonderful goal, but it’s a hard leap to climb,” Schumer said. “Someone who comes from the family that makes $500,000, they can afford tuition and so what our plan does—debt-free—is it lowers the cost of tuition, it gives you more aid … I don’t know if the very wealthy have to graduate tuition-free.”

Lowering interest rates on student loans is a key part of the legislation for Schumer. “The bill will allow student loan borrowers to refinance their outstanding student debt at much lower interest rates,” he said. “It is amazing that the federal government charges people 6, 7, 8, 9 percent on student debt when the interest rates are 3 percent—they charge the big banks on the overnight rates less than 3 percent—how dare they charge students so much? The federal government should not be making a profit on the backs of our students.” According to Federal Student Aid, Direct Subsidized and Unsubsidized Loans for undergraduates are charged an interest rate of 4.29 percent.

The RED Act would also allow for Pell Grants—given to students with financial need, who have not earned a bachelor’s degree—to keep up with inflation and rising tuition costs. Schumer noted that the legislation would tie Pell Grants to the Consumer Price Index, which, according to the Bureau of Labor Statistics, reflects “the prices paid by urban consumers for a representative basket of goods and services.”

Schumer is backed by other Senate Democrats, but acknowledged that his legislation is lacking bipartisan support. “I don’t like being partisan, but in this case, the Republicans in the Senate and the House are blocking anything; they don’t want the government to do anything more for students, and that’s all,” he said. “Senate Democrats all across the country will be ramping up the pressure on Congress to act using the ‘#InTheRed’ campaign … That’s how we’re going to get the Republicans in Congress to support this campaign.”

Schumer also noted that similar plans are in place in other developed countries. “Countries across the world—take Germany as an example—are working to make higher college more affordable and America is lagging behind,” he said. “They have a federal government that is more active in helping their students and Germany has a lower unemployment rate and its income levels are higher. We ought to be moving in that direction.”

Associate Dean of Leadership and Service, director of the Geneseo Opportunities for Leadership Development program and former UUP lobbyist Tom Matthews said that he supports Schumer’s endeavors. “I’m not an economist; [student debt] figures are so huge that most of us can’t even fathom what the meaning of all that debt is,” he said. The amount of student debt in America is around $1 trillion. “If two years of college is almost required for almost anything … [making it tuition free] does make sense.”

Matthews also noted that he is skeptical about the legislation’s ability to pass through Congress. “I like Schumer getting out there in front of it, but where it’ll go in Congress, I don’t know,” he said. “If Hillary [Clinton] gets elected president and we have a Democratic Senate by some strange political fate, maybe that might change.” 

The RED Act is expected to be formally introduced to the Senate in the next few weeks.