There’s no doubt that a college education is still one of the surest ways to gain the skills needed to build a successful career. But if students and their families cannot afford to pay for a college education without taking on massive student loan debt, we are making that important investment in their future much more costly than it needs to be.
In the last decade, student loan debt surpassed credit card debt. Even though our state has taken steps to make college affordable and accessible, far too many students and families in New Mexico struggle to pay for their education. Our state has the highest default rate on federal student loans in the entire nation. Being buried in student loan debt is making it impossible for many families to buy a home, purchase a car or stay afloat financially.
That’s why I introduced the Degrees Not Debt Act to give more low- and middle-income students the opportunity to attend college without taking on student loan debt. For a fraction of the $1.7 trillion tax cut that President Trump and Congressional Republicans passed for the wealthiest Americans, we can make public colleges and universities affordable for the average American family. Instead of giving the über-wealthy a tax break, we can help middle-class families pay for the full cost of college attendance.
The Degrees Not Debt Act will do this by bringing the federal government’s primary tool to help students afford college—the Pell Grant—into the 21st Century. Pell Grants were created more than 50 years ago to make a college education accessible to all low- and middle-income families. When Pell Grants were first created, they did just that. During the 1970s, their value steadily increased from $452 to $1,800. In those days, that went a long way toward covering the cost of a college education. Since then, however, the cost of college has grown five times faster than the rate of inflation, and Pell Grants have failed to keep pace.
The Degrees Not Debt Act would raise the value of Pell Grants from their current value of a little more than $6,000 up to $10,000 a year and ensure that almost all families who need help paying for college receive the full Pell Grant. Households with incomes up to 250 percent of the Federal Poverty Level—a little over $60,000 a year for a family of four—would be eligible for the full $10,000 Pell Grant. This would cover about 60 percent of the individuals and families attending college in America. In New Mexico, $10,000 per year would cover the full cost of tuition at all of our in-state colleges and universities. It would also help cover some of the living expenses like food and housing that make up the full cost of attending college.
Since the Great Recession, state governments have cut back on funding for higher education. Adjusting for inflation, between 2008 and 2017, New Mexico cut funding to our universities and colleges by nearly a third. Spending-per-student in our state dropped by approximately $4,500. Unsurprisingly, universities are passing those state budget cuts on to students in the form of higher tuition and cuts to services. And with the Lottery on shakier ground in recent years, New Mexico families can no longer count on its scholarships to cover those increased costs. Under the Degrees Not Debt Act, states like New Mexico would be required to reinvest in colleges and universities to receive Pell Grant funding for their students.
There would also be stakes for colleges and universities attached to this increased Pell Grant funding. This wouldn’t just be free money fueling the same old cycle we’ve seen over the last decades of colleges raising their tuition higher and building sports stadiums instead of improving education outcomes. Under my bill, colleges would be required to report key indicators of successful outcomes—including graduation rates, employment outcomes, cost, and student debt.
Instead of giving tax breaks to the most economically fortunate, we should be making forward-looking investments in our next generation of leaders. Our state’s prospects depend on our students having a fair shot at building a brighter future for all of us.