Democratic Contenders Get Ambitious With Equity Proposals
Student loan debt has become perhaps the biggest preoccupation of policy makers overseeing the higher education system.
But often buried beneath headlines about graduates with six-figure debt is the reality that students who most need loans to attend college come from families with little or no savings. That’s especially true of African American households, who rely on loans to send children to college to a greater extent and spend more of their income after loans and grant aid on higher ed than white families.
A proposal from Senator Cory Booker, a New Jersey Democrat, aims to address those patterns of inequality in the U.S. by establishing a savings account for every child in the country when they are born. The federal government would make payments of as much as $2,000 into the account each year based on family income until the child turns 18 -- at which point, he or she could use the money to buy a home or pay for a college education.
It’s the latest ambitious policy idea offered by a handful of expected 2020 Democratic presidential contenders. Senator Bernie Sanders, a Vermont Independent, has introduced legislation for tuition-free public college and Medicare for all. California senator Kamala Harris earlier this month introduced a $2 trillion tax-credit proposal that would boost middle-class incomes by as much as $3,000 per year for individuals and $6,000 for married couples. And Booker has previously introduced legislation for a federal job guarantee.
The Booker "baby bonds" bill and the Harris tax-credit bill both could provide more money for students and families to pay for costs like a college education, although they take very different approaches.
The Booker legislation, dubbed the American Opportunity Accounts Act, follows 20 years of legislative proposals at the federal level to address inequality by creating account-based interventions for children. It would have a larger scale, however, and do more than previous plans to target poor children.
“It’s progressive in a way that that nothing that has come before it really is,” said Justin King, policy director at New America’s Family-Centered Social Policy program.
The latest Booker bill promises as much as $46,215 for each child from a family of four at or below the federal poverty line. That’s well above the roughly $30,000 debt that the average student loan borrower left college with in 2017, according to the Institute for College Access and Success.
Booker said that nearly one in three American families have either zero or negative net wealth.
“This proposal is about helping families break through barriers that keep so many Americans from wealth-creating opportunities like higher education and home ownership,” he said in a statement announcing the bill. “Combined with other tax policy changes, like an expansion of the earned income tax credit, this bill will help level the playing field in our country to ensure that every child has a chance to live their version of the American dream.”
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