Last week, the Bloomberg campaign released his official platform on higher education for the 2020 presidential election. This platform may not be as shiny and bright as those candidates promising trillions in unfettered giveaway. And it doesn’t even provide any particularly clever or novel solutions. But it’s a plan that at least reflects an appreciation and understanding of the real needs facing students and our country.
Rather than jumping in with the more progressive candidates who are proposing various forms of free college, Bloomberg has proposed some incremental changes to the existing infrastructure that will make federal student aid both more progressive and potentially more effective.
First, the plan proposes to increase grant aid in a manner that delivers more benefits to the most economically disadvantaged students. That’s in contrast to the free college proposals that are often criticized for benefiting more well-off students who would have been able to afford college even without the subsidy. While details on the reallocation of Pell Grant aid are scant, the plan indicates an understanding of the fact that grant aid should cover costs beyond tuition and fees if we wish to overcome the barriers to enrollment being faced by the most economically disadvantaged students. The plan promises to deliver grant aid to cover expenses like books, meals, transportation and childcare for the lowest-income students.
Bloomberg’s plan also seeks to lower the burden of student loans by expanding the income-driven repayment plan. These plans allow borrowers to pay a set percentage of their disposable income in lieu of their scheduled payments and to be eligible for forgiveness of any balances that remain after making 20 years of payments. His plan drops the percentage of disposable income that borrowers are required to pay. This isn’t a policy I would necessarily endorse; it likely means we’ll be forgiving more debt for individuals who are arguably well-off financially. But I’m glad to see it reflect an understanding that loans should only be forgiven when repayment causes hardship for an extended time period. That’s the only way to ensure that tax dollars are being spent on those who truly need it and that moral hazard and other perverse incentives are minimized.
Lastly, the plan reflects a concern for the quality of higher education and offers strategies for improvement, including direct grants for socially desirable outcomes such as increased diversity at elite institutions and additional transparency about student outcomes, delivered through the improved collection and publication of data on student earnings, employment and loan-repayment outcomes. This reflects a desire to make the market for higher education work better, rather than a desire to replace the market with a socialized system. It also understands that government intervention in markets can have unintended consequences.
Bloomberg’s platform shows that his campaign is serious about moving beyond the rhetoric, understanding the real challenges facing higher education today and crafting implementable solutions. It’s hard to ask for more than that.
Beth Akers is a senior fellow at the Manhattan Institute and a former Council of Economic Advisors economist. Follow her on Twitter here.
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