“Higher Ed – Lower Debt” Bills To Be Filed
On December 1, Rep. Kip Kendrick will again file three bills as part of his “Higher Ed – Lower Debt” plan. The trio of bills is aimed at reducing the growing burden of debt held by Missouri’s students––debt largely due to the rising portion of educational costs borne by students in the face of declining funding from the state.
Unfortunately, Missouri is not unique. Student debt continues to be a growing economic concern across the U.S. There is $1.4 trillion in student debt on the books nationwide, with the average student borrower in Missouri owing over $27,000. Student debt has quickly grown to become the second-largest consumer debt after home mortgages. It has risen most drastically in recent years as states cut funding for public higher education in the wake of two recessions and expansive tax cuts. Just last year in Missouri, public higher education saw over $90 million in cuts from HB 3, the appropriations bill funding higher education.
Student debt is a non-partisan issue and it requires a non-partisan solution. It’s critical that we stop ignoring the issue. Our failure to act will mean the next generation of leaders is buried in massive student debt with far-reaching consequences. Those consequences hurt not only students; they impact all Missourians.
The Higher Ed – Lower Debt plan includes:
- Student Loan Refinancing Program
- Student Loan Bill of Rights
- State Work Study Program
1. The Student Loan Refinancing Program is a bill that would allow borrowers to consolidate and refinance student loans with lower interest rates, extend the repayment period and cap monthly payments to a manageable percent of income similar to federal income-based repayment plans. In order to refinance, a borrower must be a Missouri resident and have graduated with an associate’s degree or higher. This requirement is important as data shows 90 percent of those defaulting on student loans have not completed a degree.
- The Student Loan Bill of Rights would create the Office of Student Loan Ombudsman in the Missouri Department of Higher Education to ensure that student borrowers have reliable information, receive quality customer service, and have adequate access to repayment options. This ombudsman office will also provide additional oversight of student loan servicers operating within the state to ensure consumers will be better protected from servicer errors, thereby increasing transparency and accountability within the loan servicing industry.
The State Work Study Program will allow students to pursue career interests, develop skills and relationships with employers, earn money, and receive credit toward their degree while enrolled in college. Students would be encouraged to work off campus, building the skills and relationships needed for a smooth transition to the workforce after graduation. The program would allow students to take a wage subsidy to employers in their relevant career field. The money earned by students could be used to pay off student debt or cover living expenses while in school.
Missouri employers would benefit from the wage subsidy provision as well as the competitive advantage they would enjoy from training and preparing students prior to potential full-time employment after graduation. Having the opportunity to retain the state’s best and brightest for Missouri’s workforce would benefit all of us. The State Work Study Program will bridge the gap between college and career for young professionals. This is an economic development bill focused on keeping college affordable and accessible for all Missourians.