WASHINGTON – Joint Economic Committee (JEC) Ranking Member Carolyn Maloney (D-N.Y.) Wednesday argued for increased state and federal investment in higher education at a hearing to examine private sector solutions to skyrocketing student loan debt.
“Rather than look to the private sector to magically solve this problem, we should strengthen the public commitment to higher education,” Maloney said. “We need to remember that an educated workforce is a public good and without government involvement, we would underinvest in education.
“Our goal should be college education that is more accessible and more affordable. The federal government, state governments, universities, colleges, community colleges, the private sector and families all have a role to play.”
Student debt now stands close to $1.3 trillion. Between 1980 and 2011, most states reduced funding for universities and colleges, shifting the financial burden to students and their families. This trend was exacerbated by the Great Recession as state revenues evaporated. Furthermore, the economic downturn encouraged more people to pursue higher education as job opportunities shrank. At the same time, enrollment at for-profit institutions soared, growing by more than 300% between 2000 and 2011.
The Republican solution to the student loan debt crisis is to turn to the private sector and income share agreements (ISAs) – contracts that call on private investors to pay all or part of a student’s college costs upfront in exchange for a share of the student’s future income for a fixed number of years.
Maloney voiced a number of concerns about ISAs, including the need for consumer protections such as responsible income exemptions, lifetime caps on payments, protection against discrimination, and the cherry picking of students majoring in subjects likely to pay more. She called for “the highest level of transparency and common sense protections.”
Maloney also stressed the need for states to “partner with the federal government to reinvest in higher education,” for the federal government to “increase investments in Pell grants,” and for free tuition at community colleges.
Read Congresswoman Maloney’s full statement here
Watch the hearing here: www.jec.senate.gov
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