The following guest commentary was written by Oregon Senator Jeff Merkley.
The promise that the next generation will be able to go further and do better than the last one is the heart of the American Dream. I was fortunate enough to have that chance. I grew up in a blue collar neighborhood and was the first in my family to go to college. My dad set me on that path when I was in grade school. He took me to the school and said, “If you go through those doors and you work hard, you can do just about anything here in America.”
I still live in that same neighborhood and my kids go to the same high school I attended, but what I’m seeing and hearing from students and their parents is very different today. Even as college has become more critical to economic success, rising costs are putting college out of reach for more and more Americans. The rising cost of college tuition has vastly exceeded general inflation and Pell grants cover less of the cost. Thus, student loan debt has exploded, tripling since 2004 and topping total credit card debt. Oregon graduates with loans now carry an average of more than $24,000 in debt.
That debt is hurting students and our entire economy. Because of their debt, many Americans are unable to buy a home, save for retirement, start a business, or even start a family. Others, wary of having student debt the size of a home mortgage, are dissuaded from going to college in the first place. This result hurts both the individual, who sees no path to fully explore his or her dreams and potential, and our society, which benefits when individuals thrive.
That is why I’m committed to giving student borrowers a fair shot by refinancing their student loans and finding solutions to make college affordable for our middle-class students and their families.
We must do all we can to change this dynamic. That means our colleges must work hard to cap the growth of tuition, and Congress must increase Pell grants to keep pace with inflation.
But we must also attack the high cost of student loans. Last year, Congress, headed off a scheduled interest rate hike, and as a result, undergraduate students borrowing this school year are able to take advantage of historically low rates. That’s a start. The next step should be to enable students with previous loans to refinance these high-interest loans at the same low rates, putting more money in their pockets and strengthening our economy.
We should also be exploring opportunities to promote college affordability by looking at innovative solutions. I’ve introduced legislation in the Senate to help launch pilot projects for the “Pay It Forward” model. This plan, developed by Oregon students would create an option for students to replace traditional loans with a “Pay It Forward” grant. In exchange, the student would pledge to pay a small percentage of his or her future income into a fund for grants for the next generation. This approach might solve the problem of students foregoing education because they fear getting trapped between modest future wages and high monthly loan payments.
I am grateful that my parents believed in a vision of full opportunity for every American and encouraged me to seize that opportunity. That vision is slipping away, however, and we must do all we can to restore it. I’m committed to making college more affordable so that every student who is determined to go through the school house doors and work hard, can do just about anything here in America.