Under Clinton’s Plan, Iowa Families Could Save Up to $28,400 in College Expenses

In Iowa, Costs Won’t Be a Barrier, and Debt Won’t Hold You Back

Earlier this month, Hillary Clinton announced her plan to make sure that cost is not a barrier to attending college and debt does not hold students back once they graduate. The New College Compact ensures that students can attend a 4-year public college without taking out loans for tuition and attend community college tuition-free.

This plan is a compact. Students and families are ready to do their part. Everyone else — the federal government, states like Iowa, and colleges and universities — will need to step up and do theirs too. States are going to have to re-invest in higher education and colleges and universities must work to reduce costs and raise graduation rates.

Here’s the bottom line for students and families if Iowa joins the New College Compact:

The New College Compact Could Benefit Thousands of Students:[1]

• In Iowa, around 33,000 in-state, full-time students at four-year public colleges, and around 93,800 community college students could benefit from the New College Compact.
• Thousands more students at private colleges could also benefit from additional support for private non-profits, HBCUs, HSIs, and other MSIs — and every student, no matter where they’re from or where they go, could benefit from lower student loan interest rates and income-based repayment after they graduate.

The New College Compact Could Ensure No-Loan Tuition and Save Students Tens of Thousands:[2]

• In Iowa, students at four-year public colleges who take out loans graduate with average debt between $23,200 and$29,900. And the total cost of attendance is around $18,900 per year.
• If Iowa joins the New College Compact, after full implementation, it could reduce the expenses of a full-time, four-year public college student through a combination of state reinvestment, federal resources, cost-saving innovation at colleges and universities, and lower interest rates.
• For a family earning $25,000 per year: Iowa could have the resources to reduce expenses by $28,400 over four years of college and the life of their loans.
• For a family earning $50,000 per year: Iowa could have the resources to reduce expenses by $25,700 over four years of college and the life of their loans.
• For a family earning $75,000 per year: Iowa could have the resources to reduce expenses by $22,300 over four years of college and the life of their loans.
• For a family earning $100,000 per year: Iowa could have the resources to reduce expenses by $18,900 over four years of college and the life of their loans.
• If Iowa joins the New College Compact, a student at community college could save $9,100 over two years because tuition would be free.

The New College Compact could save Graduates with Debt Thousands through Refinancing:[3]

Students and families in Iowa took out $1.7 billion in debt last year. Clinton’s plan could benefit a student who borrowed a cumulative total of $30,000 in direct loans at a higher rate of 6.8% in prior years:

• Borrower could repay up to $4,000 less in interest over the life of the loan.
• Monthly payment could fall by as much as $33 — or $400 over the year.

Read more about the rest of the New College Compact here.

[1] Data on enrollment in Iowa drawn from Dept. of Ed. IPEDS database, at https://nces.ed.gov/ipeds/.

[2] Data on debt and cost of attendance based on TICAS and College Board state-by-state reports at http://ticas.org/posd/map-state-data andhttp://trends.collegeboard.org/college-pricing/figures-tables/tuition-fees-sector-state-time. Calculation of potential savings based on typical student debt, federal grants made available under Clinton plan, and state investment data compiled by the Center on Budget and Policy Priorities athttp://www.cbpp.org/research/state-budget-and-tax/years-of-cuts-threaten-to-put-college-out-of-reach-for-more-students. Interest savings calculated with methods of Dept. of Ed. Repayment Estimator at https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action.

[3] Debt data from Dept. of Ed. at https://studentaid.ed.gov/sa/about/data-center/student/title-iv. Savings calculated with methods of Dept. of Ed. Repayment Calculator.