/How Joe Biden would make community college free and fix student loans

How Joe Biden would make community college free and fix student loans

Additionally, Biden’s plan calls for doubling the maximum value of Pell Grants, and automatically increasing the value based on inflation. He would allow Pell Grants for former prisoners, and ensure Dreamers are eligible for financial aid. Biden also introduced a new grant called a “Title I for postsecondary education,” which is intended to help four-year schools without a lot of money that serve large numbers of Pell-eligible students.

His plan also cracks down on for-profits and private loan lenders “profiteering off of students.” For example, Biden says he would push for Congress to pass a law permitting the discharge of private student loans in bankruptcy.

How much would it cost?

$750 billion

The plan would cost $750 billion, funded over 10 years.

Here’s how some of the money would be distributed:

— $50 billion would be spent on workforce training, including community college business partnerships and apprenticeships.

— $8 billion would be spent to improve community college facilities.

— Over $70 billion would be invested in historically black colleges, tribal colleges and institutions that serve minorities.

Biden’s proposal “will be paid for by making sure that the super-wealthy pay their fair share,” says a campaign document shared with reporters on Monday night.

It adds that changes in tax law would pay for the Biden proposal, including capping itemized deductions taken by the wealthiest Americans at 28 percent and eliminating what’s known as the stepped-up basis loophole, which affects mostly the wealthy. Former President Barack Obama put forward a similar proposal affecting taxes in 2015.

How would it work?

Free community college

Similar to Obama’s free two-year college proposal in 2015, the free community college initiative is framed as a federal-state partnership, with the federal government covering 75 percent of the cost and states contributing what’s remaining.

Nontraditional students, Dreamers and part-time students would be eligible to partake in free community college, along with recent high school graduates.

The Biden campaign classified the initiative as a “first-dollar program,” which means students would be able to use Pell Grants, state aid and other aid to help them cover expenses beyond tuition and fees.

Income-based loan repayment and Public Service Loan Forgiveness Program

Under a simplified income-based repayment program proposed by Biden, those who are making $25,000 or less per year would not owe any payments on their undergraduate federal student loans and would not accrue any interest on those loans. Others would pay 5 percent of their discretionary income over $25,000 toward their loans.

After 20 years, the remainder of the loans for people who have made payments through the program would be forgiven. Biden would also change the tax code so that debt forgiven through the income-based repayment plan would not be taxed. Those with new or existing loans would be automatically enrolled in the income-based repayment program, unless they opt out.

Biden’s plan says the Public Service Loan Forgiveness Program, which is intended to forgive the remaining balance on loans after 10 years of qualifying payments under a qualifying repayment plan, “is broken.” Under his plan, those working in schools, government and other nonprofits would be automatically enrolled in the forgiveness program, which would offer $10,000 of undergraduate or graduate student debt relief for every year of national or community service, up to five years. Anyone with up to five years of prior national or community service would also qualify for the forgiveness.

What have other candidates proposed?

Biden’s proposal is reminiscent of Obama administration plans for higher education and represents a more moderate and modest approach than those that Biden’s more progressive opponents like Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) have proposed. They’ve pitched debt-free college for four-year public universities and eliminating large swaths of existing student loan debt.

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