Erase Your Student Loans the Howard Dean Way


On Wednesday, Howard Dean’s campaign unveiled a revolutionary—some would say radical—proposal for lowering the cost of college in America, while at the same time encouraging a fresh wave of national service. In a speech at Dartmouth College in New Hampshire on Thursday, the Democratic frontrunner is expected to announce details of a sweeping plan he claims will guarantee “every young person access to an affordable four-year college education.”

The “College Commitment,” as the policy is called, promises that all students will have access to $10,000 annually for college, provided in a mix of grants and loans, depending on family earnings. After school, students would make regular payments on the full debt, but they’d receive a tax credit at the end of each year for any amount they’d paid over 10 percent of their income. That way, the campaign argues, no one would ever pay out more than 10 percent of their earnings, or have to make payments for more than a decade.

Working retroactively, the policy would apply to anyone with outstanding loans, even people who graduated years ago. It wouldn’t cover the expense of graduate school.

Dean’s campaign estimates the program will cost $7.1 billion annually, money the former Vermont governor says can be raised by rolling back what his strategists term President Bush’s “reckless” tax cuts.

In return for the public support, Dean plans to ask students, beginning in the eighth grade, to “work hard in high school” and to commit to college. His vision also calls for a large expansion of the Clinton-era Americorps program, from 50,000 positions to 250,000. Finally, it pledges that graduates who enter public service—becoming police officers or teachers, for example–will pay no more than 7 percent of their annual income toward school loans.

“This has the potential to revolutionize financial aid in this country,” said Bob Shireman, a policy analyst at the Aspen Institute who consulted with the Dean campaign. And while he concedes that the plan is ambitious, Shireman says the Dean proposal strikes at the “fear” that accompanies the now complicated financial aid process.

According to a new study by the College Board, the annual costs for a year at a public university are $10,636. The fees for private schools are more than double that amount. Last year, American students received an average of $9,100 in financial aid, much of it loans. While Dean campaign staffers emphasize that the policy is intended to appeal to voters under 30, analysts point out that it stands to draw support from a much larger pool, that of poor and middle-income parents whose kids aren’t yet in college. That group includes the families of nearly 2 million Latino children expected to start college in the next decade.