The “In The Red” Bill Aims to Save Students Thousands of Dollars
By Victoria Priola
Senator Chuck Schumer turned to college newspapers for support on February 11 for a college tuition plan that is set to decrease the debt of university graduates, called “In The Red.”
“A college education is a necessity, but it is being priced as a luxury,” said Schumer on a conference call with dozens of student reporters. “It is breaking the bank for students and families across New York.”
Schumer, and dozens of his fellow Democratic senators, are campaigning to introduce a bill called the Reducing Education Debt Act, also known as the RED Act.
The legislation aims to put the United States on the path to debt free college by allowing student loan borrowers to refinance their outstanding student debt with much lower interest rates.
The federal government currently charges people anywhere between six to nine percent interest on student debt, but charge the big banks on the overnight rates less than 3%.
“[Schumer’s plan] is a good step forward,” said Emely Larissa Aparicio, a junior at CSI. “But interest will always be an issue.”
The RED Act, if passed, will make two years of community college free, helping students earn associates degrees, or start the path to a bachelor’s degree and gain the skills they need to succeed in the workforce without having to take on crippling debt.
This will not apply to those who are already in college. Schumer does, however, promise a debt that will be significantly lowered for senior students.
The senators are in the midst of spreading the word on their new campaign to their hometowns.
According to Schumer, there is more student loan debt than there is credit card and auto debt and it has doubled since 2007.
The average college graduate has $28,000 in student loan debt in New York, the proportion of New York college graduates for student loan debt is 61%.
During the conference call, Schumer recalled a memory he had of a young women telling him that “my parents could afford a house, I can’t. My parents could afford medical care, I can’t. My parents could afford college, I can’t.”
This became a big part of his motivation to push this bill into action.
“[The RED Act] easier to achieve than tuition free because it costs less and it goes to people like middle class kids and people trying to be middle class,” said Schumer, comparing his plan directly to Senator and Democratic presidential candidate Bernie Sanders. “That of the very wealthy will graduate tuition free anyway.”
Both Senator Sanders and Schumer reference to, and praise, Germany’s higher education system in their conversations about college tuition debt.
Germany has eliminated tuition altogether because they believed that charging students $1,300 per year was discouraging Germans from going to college, according to Sanders’ campaign website.
“I like Senator Sanders very much. His plan is a very worthy goal,” said Schumer. “I think we should first try to go for debt free, and then maybe we can move on to tuition free.”
When a student reporter asked Schumer why European countries can provide better aid, he replied that the political climate and situation of European countries are vastly different from the United States.
“They have a federal government that is more active in helping their students and Germany has a lower unemployment rate and its income levels are higher,” Schumer said
Democratic candidate and former Secretary of State Hillary Clinton and Schumer’s plan for college tuition debt are virtually identical.
A slight difference is that on her website, Clinton says students will do their part by contributing their earnings from working 10 hours a week. Schumer suggested that students work 15-20 hours a week at a high paying job to pay off the costs while enrolled in classes.
Democratic senators are willing to work with any other programs that focus on cutting tuition costs and loan forgiveness.
“There are plans in some states, and we’re looking at these, where you promise to pay a percentage of your income over the years and you don’t have to pay tuition, or you pay much lower tuition,” said Schumer.
The main criticism Schumer is expecting from this is the overall cost of the bill.
To fund this, the RED Act proposes to cut tax breaks for auto companies and block certain loopholes multimillionaires use to get out of paying taxes.
“There are some, particularly the most conservative folks that don’t want to do that,” said Schumer. “I don’t mean the conservative folks on your campus, I mean the conservative folks in the senate now. But I think they’re wrong and we’re hoping to get back partisan support.”
Schumer did not specify a time to execute this plan on the conference call. What’s important as of now, according to him, is spread awareness and support.
“Students have power if they mobilize,” said Schumer. “This’ll help our students, this’ll help their families, but it will also help America.”