To Curb Student Debt, Reduce College Costs

Sen. Ryan Aument (R-36)

Opponents of President Biden’s student loan forgiveness plan are missing the mark on why it’s a bad idea.

Complaining that it is unfair to those who paid their loans, or to those who didn’t attend college, while correct, merely empowers the other side to slap back with a major dose of “whataboutism.”

What about those who don’t drive but pay road taxes? What about corporations who receive tax credits? What about these kids saddled with debt?

In a prime example of whataboutism, an emboldened Biden White House tweeted the names of Republican opponents who were forgiven pandemic relief loans that allowed them to meet payrolls.

This comparison only makes sense if you forget that businesses needed those loans to stay afloat and meet payrolls after the government forced them to close. This is much different than forgiving student loans and an insulting comparison to the many businesses who closed for good under the weight of government’s heavy hand.

The real fault with the president’s decision is that it adds, however incrementally, to inflation and does nothing to rein in college costs. In fact, it could end up increasing costs by giving schools and students the notion that, when it comes to bad economics, higher education is exempt from consequences.

For years university administrators have jacked up tuition to subsidize grandiose salaries for a burgeoning payroll of middle managers and educational bureaucrats who add nothing to undergraduate education. Good luck if you think loan forgiveness will encourage them to economize.

Lost are the days when higher education focused on in-demand skills and careers without the glitz of expansive campuses and high-end housing. College seems to have jumped from a purposeful educational challenge to a social experience where young adults pay top dollar with no assured career afterward.

If Joe Biden wants to slay the student debt dragon, he shouldn’t be feeding it.

Pennsylvania has made a start in that battle by consolidating its unreasonably priced state college system. But, at the same time, we continue to write huge subsidies for state-related schools, but without the promised lowered tuitions that were part of that bargain more than 50 years ago.

The reason state dollars represent a declining percentage of education funding isn’t because we haven’t kept contributing. It’s because they keep increasing their budgets, wracking students with tuition hikes to cover administrative extravagance. All the while, blue chip private schools amass endowments the size of some national budgets, raising the top line for tuition rates.

I don’t resent a young man or woman having their college debt forgiven. What I resent is that students yet to come will be marched into the same financial minefield. The only thing different is that we have carried off some of its wounded. The system is still broken.

When we lose sight of the purpose of higher education — the idea that it will produce productive citizens in a functioning democracy — we are funding a product, not a process. To paraphrase Thoreau, we are building our castles in the air, where they ought to be, but failing to put the foundations under them.

The reform of America’s system of higher education will require more than a one-time bailout that gives schools no incentive to lower their costs. We need a systemic restructuring that will take years to create. It’s not something that will be accomplished to meet a campaign promise in time for reelection.

Though any effort to solve this problem will be met with heavy resistance from Big Academia, it will be the right thing to do because young people will again live their dreams, not their debts. College will again be an education and not a transaction.

Senator Aument Reintroduces Bills to Help Students, Protect Taxpayers, & Grow the Economy

(HARRISBURG) – Senator Ryan P. Aument (R-36) recently reintroduced two bills to ease the strain of the student loan debt crisis on current students and graduates, while emphasizing the importance of personal responsibility and protecting taxpayers.

“If we are to restore Pennsylvania’s economy, it is crucial that we seek to attract the next generation of college graduates to stay in our state after earning their degree to help grow our tax base and stimulate local economies,” said Aument. “As such, we cannot ignore the student loan debt crisis. Addressing it in a fiscally responsible manner that serves the needs of students and taxpayers alike is absolutely critical if we want to help the next generation experience earned success and upward economic mobility in Pennsylvania.”

According to the cosponsor memo for the bills, college tuition has increased by over 3,000 percent since 1969, far outpacing the increase in the consumer price index. Yet, studies show that today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago. This has resulted in younger generations taking on 300 percent more student loan debt than their parent’s generation. While many argue that students should forgo post-secondary education altogether due to the astronomical cost, the reality of our current job market is that over 65 percent of job openings through 2020 required a college degree.

“If we fail to address this crisis, it will have ripple effects on every aspect of our economy,” said Aument. “We need to find commonsense solutions that will help Pennsylvanians repay and meet their student loan obligations, under reasonable terms, without freeing them entirely from their personal responsibility to do so.”

Senate Bill 143 would support Pennsylvanians who graduated with significant student loan debt by creating the Student Loan Retirement Agreement Program, which would allow borrowers to repay onerous student loans through the use of Income Share Agreements (ISAs).

Under an ISA, a participant would agree to pay a fixed share or percentage of their income for a set period of time in order to pay off their student loan debt. Applicants must have completed their degree and begun responsibly meeting their current student loan obligations, among other requirements, in order to be eligible for the program.

Initial funding for the program would come from a revolving line of credit using funds already managed by the Pennsylvania Treasurer. The program would not be funded by state tax revenues or new debt that must be repaid in the state budget. In other words, taxpayers will not be on the hook to repay a debt that is not theirs.

The second bill in the package, Senate Bill 144, would authorize a study of the desirability and feasibility of using ISAs for current students attending a post-secondary institution as a way to finance their education. The Higher Education Income Share Financing Pilot Program established by the bill would allow current students to enter into a contract with their college or university where they agree to pay a fixed percentage or “share” of their future income for a set period of time in exchange for having all or a portion of the cost of their education paid for.

“My goal is to address the student loan debt crisis using a multi-faceted approach that cuts costs on the frontend while easing the repayment process for graduates on the backend. To that end, the program proposed in Senate Bill 144 may have the effect of driving down the overall cost of education by aligning the interests of the schools to the needs of students, reducing the overall debt burden for students.”

The programs created by both bills would be administered by the Pennsylvania Higher Education Assistance Agency (PHEAA). Both bills have been reintroduced and are awaiting referral to committee for consideration.

More information on both bills, the student loan debt crisis, income share agreements, and frequently asked questions can be found on Senator Aument’s website at https://www.senatoraument.com/student-loan-debt/.

Education reform is just one piece of Senator Aument’s core legislative priorities for 2021, which include: (1) reopening, restoring, and rebuilding Pennsylvania’s economy, (2) implementing key government reform measures to rein in the governor’s powers during emergency disaster declarations, reform our election process, and limit government spending, (3) distributing the COVID-19 vaccine effectively and efficiently to all Pennsylvanians who want it, and (4) expanding educational opportunities for Pennsylvania students and families.

Senator Ryan P. Aument (R-36) on the Senate floor earlier this year. 

VIDEO: To watch a video where Senator Aument explains how the income share agreements in Senate Bill 143 work, click here.

CONTACT:  Ryan Boop (717) 787-4420

Aument Introduces Proposals to Address Student Loan Debt Crisis

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HARRISBURG – Senator Ryan P. Aument (R-36) introduced two bills today to ease the strain of the student loan debt crisis on current students and graduates, while emphasizing the importance of personal responsibility and protecting taxpayers.

“The student loan debt crisis cannot be ignored,” Aument said. “Addressing it in a fiscally responsible manner that serves the needs of students, taxpayers, and institutions of higher education alike is absolutely critical if we want to help the next generation experience earned success and upward economic mobility in Pennsylvania.”

“As I’ve said before, higher education is bankrupting an entire generation, serving as a barrier, rather than a pathway to economic opportunity for far too many. The skyrocketing cost of college is leading younger generations to take on 300 percent more student loan debt than their parents’ generation,” Aument said. “If we fail to address this crisis, it will have ripple effects on every aspect of our economy. We need to find commonsense solutions that will help Pennsylvanians repay and meet their student loan obligations, under reasonable terms, without freeing them entirely from their personal responsibility to do so.”

Senate Bill 1042 would support Pennsylvanians who graduated with significant student loan debt by creating the Student Loan Retirement Agreement Program, which would allow borrowers to repay onerous student loans through the use of Income Share Agreements (ISAs).

Under an ISA, a participant would agree to pay a fixed share of their income for a set period of time in order to pay off their student loan debt. Applicants must have completed their degree and begun responsibly meeting their current student loan obligations, among other requirements, in order to be eligible for the program.

Initial funding for the program would come from a revolving line of credit using funds already managed by the Pennsylvania Treasurer. The program would not be funded by state tax revenues or new debt that must be repaid in the state budget. The program would be administered by the Pennsylvania Higher Education Assistance Agency (PHEAA).

“Many graduates not only face a large debt load, but also high interest rates on the commercial market that make it difficult to pay down the balance of their loans,” Aument said. “Creating this program will give borrowers a more manageable repayment plan that follows the growth of their careers and their earning potential.”

The second bill in the package, Senate Bill 1043, would apply a similar concept to current students by establishing the Higher Education Income Share Financing Pilot Program, also administered by PHEAA. This program would allow current students to enter into a contract with their college or university where they agree to pay a fixed percentage or “share” of their future income for a set period of time in exchange for having all or a portion of the cost of their education paid for.

“My goal is to address the student loan debt crisis using a multi-faceted approach that cuts costs on the frontend while easing the repayment process for graduates on the backend. To that end, the program proposed in Senate Bill 1043 may have the effect of driving down the overall cost of education by aligning the interests of the schools to the needs of students, reducing the overall debt burden for students.”

Both bills have been introduced and are awaiting referral to committee for consideration.

More information on both bills, the student loan debt crisis, income share agreements, and frequently asked questions can be found on Senator Aument’s website at https://www.senatoraument.com/student-loan-debt/.

Additionally, Senator Aument has been working to address the rising cost of college through his participation on the Higher Education Funding Commission, established in 2019 by legislation that he sponsored along with Senator Pat Browne. Members of the Commission will consider the state’s role in funding higher education through topics such as affordability, administration and operations, graduation and retention rates, student financial aid, job placement after graduation, entry level wages, student loan debt, and the overall goal of higher education.

Through his role on the Commission, Aument hopes to look at performance-based metrics for higher education funding decisions as a way to hold institutions accountable for results; for example, prioritizing funding for institutions that graduate students with degrees that are in high demand in Pennsylvania.  He points out that this may entail placing more emphasis on alternative pathways such as tech schools, certificate programs, trades, and apprenticeships.

More information on the Higher Education Funding Commission, including video footage of hearings, can be found on the Commission’s website at https://highereducationfundingcommission.pasenategop.com/.

Senator Aument’s policy goals as he works with his colleagues to address the student loan debt crisis. 

CONTACT:  Ryan Boop (717) 787-4420

Senators Aument and Martin Express Concerns About Wolf Budget Plan

HARRISBURG – Lancaster County Senators Ryan P. Aument (R-36) and Scott Martin (R-13) voiced concerns about the level of new spending and borrowing in the $36.1 billion budget plan outlined by Governor Wolf today.

The governor’s 2020-21 budget proposal would increase state spending by approximately $1.5 billion (4.2 percent) over the current year’s total. The plan also includes more than a billion dollars in new borrowing for various projects.

“Many of the ideas that Governor Wolf presented today are laudable, but we need to take a closer look at how we can achieve these goals in a way that is more fiscally responsible,” Aument said. “The large spending increase that the governor proposed today far outpaces inflation, and coupled with significant increases in supplemental spending, results in a risky financial profile for the future of the Commonwealth.

“I am relieved that the governor is not calling for any broad-based tax increases, given our objections to that. However, future tax hikes are inevitable if we do not control the growth of state spending and borrowing,” Martin said. “Medicaid and other social service programs are one of the biggest cost-drivers in the budget and the Governor has overspent in this area by close to a billion dollars in each of the last two years. If we want to preserve these programs for future generations, we need to take a closer look at how we can root out waste, fraud and abuse of these programs through measures like my bill to implement work requirements for able-bodied Medicaid recipients.”

The budget proposal would increase Basic Education Funding by $100 million, a 1.6-percent increase. Additional funding is also included for early childhood education ($30 million) and special education ($25 million). Line items for career and technical education ($99 million) and the Thaddeus Stevens College of Technology ($18.7 million) were both flat-funded.

Wolf’s budget seeks to address the student debt crisis by increasing funding for the Pennsylvania Higher Education Assistance Agency by $42.8 million, including a $29 million increase for grants to students.

Aument, who serves on the Higher Education Funding Commission, recently announced plans to introduce his own reforms to ease the strain of the student debt crisis on current students and recent graduates. However, Aument’s bills would address the issue without millions in new spending or new debt backed by the general credit and taxing power of the Commonwealth.

“There is no doubt that the student debt crisis is one of the most challenging financial problems of our generation,” Aument said. “The fact that Governor Wolf is acknowledging the magnitude of this problem is a step in the right direction, but we must be mindful of the cost. While helping students pay for the cost of their education through grant programs is one part of the solution, tackling this issue will require a multi-faceted approach that addresses the student-loan debt crisis from all angles. These include controlling costs, making college more affordable, decreasing the financial risk of earning a degree, and helping students and their parents make informed decisions about the appropriate amount of debt to incur to accomplish their higher education goals. I look forward to the governor’s cooperation in addressing this issue in a way that is fair to current and future students, recent graduates, and taxpayers alike.”

The budget plan also included $13 million in new funding for Pennsylvania State System of Higher Education (PASSHE) – a 2.7 percent increase.

“One of the biggest challenges facing policymakers and State System administrators is how we right-size the system for future generations. We have seen enrollment decline throughout the system without a reduction in costs, which places greater financial burdens on schools and students alike,” said Martin, who is a Millersville University alum and serves on the PASSHE Board of Directors. “As we move forward, we cannot afford to throw more and more money at the problem without fixing the underlying weaknesses in the system. We need to take decisive action to help the State System meet its goal of providing a quality education at an affordable cost.”

Despite the proposed spending hikes in Governor Wolf’s budget proposal, the plan would also cut a number of critical programs for Lancaster County communities. In particular, both Senators voiced concerns about the impact of a proposed cut to the School Safety and Security Grant Program, which was created by a bill Martin co-authored in 2018. The governor’s budget plan would slash funding for the program from $60 million this year to $15 million next year.

“Regardless of what partisan differences we may have, we should all be able to agree that protecting our children is a very high priority. This grant program is one of the best tools to help local schools take the necessary steps to prevent future tragedies,” Martin said. “It is bad policy to gut a program that safeguards our children, while at the same time increasing funding for Executive Offices by more than $20 million and boosting the Governor’s Office budget by more than 9 percent.”

“The creation of this grant program was the result of bipartisan cooperation from numerous stakeholders, and the results so far have been outstanding in terms of the steps taken to protect our schools and identify students who are at risk,” Aument said. “To cut this program would be to erase that progress at the expense of the safety of our students.”

Both Senators also expressed concerns about proposed cuts to agricultural programs. A total of $4.3 million was cut from the Department of Agriculture’s budget. Nearly half of that cut came from the elimination of $2.2 million in Agriculture Research. Other cuts included the reduction or elimination of funding for the Animal Health and Diagnostic Commission, food marketing, agriculture research, and livestock and consumer health protection.

Aument introduced legislation that was part of Senate Republicans’ Farming First initiative to encourage new generations of farmers to continue the state’s rich agricultural heritage.

“The cuts to critical agriculture programs are a disappointment, especially in light of the fact that all parties have worked together over the past year to support Pennsylvania’s farmers through several new programs and initiatives to strengthen  the future of the state’s top industry,” Aument said. “We will need to look closely at the impact of these cuts in order to ensure we do not do anything that walks back the progress we have made in recent months to protect the future of Pennsylvania farming.”

Wolf’s budget includes a new tax for State Police coverage that is projected to raise $136 million. Martin expressed concerns that the tax would disproportionately affect rural communities that do not have their own police force.

“Under the current system, every community pays for State Police coverage through state income and sales taxes, driver licensing fees, gas taxes, fines and other levies paid by citizens in urban and rural areas alike. Everybody pays their fair share and nobody is getting a free ride,” Martin said. “The governor says that this proposal is different from his previous plans, but we need to take a closer look at the impact on communities of all shapes and sizes to make sure this proposal is not just another attempt to force a heavier share of the cost burden for State Police coverage on rural Pennsylvania.”

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CONTACT:  Ryan Boop (717) 787-4420 (Senator Aument)
Terry Trego (717) 787-6535 (Senator Martin)