Senate Democrats introduced the Reducing Educational Debt Act on Jan. 21 in a campaign to alleviate student debt through a combination of three major bills for which the Democrats have lobbied over the past two years.

The package of bills includes legislation introduced by Sen. Elizabeth Warren (D-Mass.) in 2014 to allow students to refinance their federal and private loans at a lower interest rate. Further, the act includes a proposal from Sen. Mazie Hirono (D-Hawaii) initiated in 2015 that aims to ensure government aid covers more of the cost of college by indexing future Pell Grant awards to inflation.

The Democrat leaders who support this act are also using it to restate their endorsement of President Barack Obama’s call to make community college free. Obama’s motion is based on the America’s College Promise Act of 2015, introduced by Sen. Tammy Baldwin (D-Wis.) to provide a federal match of 3 dollars for every dollar the state provides to waive tuition for eligible students. If all states participate, up to 9 million community college students could save an average of $3,800 in tuition each year.

Director of the Georgetown University Center on Education and the Workforce Anthony Carnevale said ensuring that young people receive a college education is paramount to the United States’ continued international success. He emphasized a need for change, noting that the United States has fallen behind other advanced nations in educational achievement.

“We know that one of the major problems holding back growth in the American economy has been our inability to produce a quality labor force on par with other nations,” Carnevale said. “The U.S. is 13th … in the world in terms of our ability to graduate people from two-year or four-year colleges.”

Associate Vice President for Federal Relations Scott Fleming also expressed support for most of the act’s components, highlighting the section allowing students to refinance their loans. He noted that Georgetown students on average have lower student loan amounts and one of the lowest default rates of any university in the country.

“It is only common sense that students should be able to refinance their student loan debt,” Fleming said. “Why this interest rate should be locked in forever doesn’t make a lot of sense. Certainly it would make it possible for students to pay off their loans even sooner.”

Fleming explained that the section of the act that would allow for free community college will be difficult to pass due to its sheer cost. In addition, if the federal budget were to increase to enable more students to attend community college, it is possible that this would leave less funding for federal loans that many Georgetown students depend on.

“The challenge with the proposal is to think about it in the overall context of the federal budget,” Fleming said. “There is reason to make sure that it … would not squeeze out money for other important programs that are important to the university.”

Carnevale also noted that this year’s increased expenditures on elderly care and national defense would hamper Congress’ ability to pay for the measures proposed in the bill. He was doubtful that any bill would be passed this year that would fundamentally alter how students pay for higher education.

“In other times, the [act] is a very good investment and we should be spending more money on this because the returns are high,” Carnevale said. “The problem is, we don’t have the money to spend and this is where all the proposals begin to get doubtful.”

Fleming expressed concern about the congressional leaders’ attempt to simplify loan and grant programs by centralizing them under federal programs such as Pell Grants and Federal Stafford Loans. As a result, he said, federal grant and loan programs such as the Federal Perkins Loan Program and the Supplemental Educational Opportunity Grants on which some Georgetown students depend might be discontinued.

“The leaders in both bodies have come out in support of what they call ‘student financial aid simplification,’” Fleming said. “[But] what their simplification programs say is that there should be one federal grant program and one federal loan program.”

Carnevale explained that the federal government should also focus on providing information regarding the value of particular fields of study to students, potentially making their decision on which college to attend easier. This would include the publication of research that examines the job prospects for each major and area of study offered in specific schools.

“We want to ensure value and efficiency in higher education,” Carnevale said. “We [should] demand that every college tell their students…what the likelihood is of getting a job and how much money they’re going to make.”

Vice Chair of the College Democrats Aditya Pande (SFS ’18), head of the club’s Higher Education and Economics Working Group, voiced support for these solutions as a way to combat growing problems in higher education. Pande argued that the ability to refinance student loans is a necessity for borrowers.

“Refinancing is critical,” Pande said. “With interest rates so low, it is absurd to think that people who have taken out loans from the federal government would not be able to refinance them at a market rate of interest.”

Pande highlighted the importance of a college education in allowing citizens to be competitive in today’s economy, which is something this bill would allow.

“We want people to have access to tools that will enable them to improve their lives,” Pande said. “If we’re serious about improving people’s life prospects, free community college is something we should do.”



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