About the Problem

The cost of college tuition in the last decade has increased by 80%, a rate of growth that is twice as much as the cost of medical care and four times the cost of housing.

The amount of money in outstanding student loan debt in the U.S. is $1 trillion.

College Hats

Education

About the Policy

Limit student loan payments by tying a student’s payment responsibilities to their ability to pay based on their income. This could be achieved by creating a minimum payment for federally guaranteed student loans based upon the borrower's income and offsetting the reduced payments by increasing the interest rate or minimum repayment amount for borrowers who subsequently have high income.

Public Support

71% of All Polled
82% of Democrats
60% of Republicans
72% of Independents

Polling data derived from three national surveys conducted by Cohen Research Group in February and March 2016. Each survey had a sample size of at least 1,000 registered voters with a margin of error of +/- 3.1%

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The cost of college tuition in the last decade has increased by 80%, a rate of growth that is twice as much as the cost of medical care and four times the cost of housing.

In 1993-94 the average debt of a college graduate averaged close to $10,000. Today, seven in ten college graduates have student loans, with an average debt of over $35,000. The amount of money in outstanding student loan debt in the U.S. is $1 trillion.

The lasting impact on students who graduate with this kind of debt can be devastating. Graduates are likely to delay buying a home, getting married, having children and are likely to make employment decisions that don’t necessarily benefit the job market (like working a job that pays more instead of a job that is better suited to them, or working several jobs instead of dedicating themselves to a career).

So how do we begin to address this growing student loan problem? One idea is to limit student loan payments by tying a student’s payment responsibilities to their abilities to pay based on their income. This could be achieved by creating a minimum payment for federally guaranteed student loans based upon the borrower’s income and offsetting the reduced payments by increasing the interest rate or minimum repayment amount for borrowers who subsequently have high income.