Congressman Tom Reed Introduces Bill To Tackle Student Loan Debt For Working-Class Students
“We have to reduce the cost of education for the kids of today and tomorrow or their debt load will destroy their future.” - Rep. Tom Reed
Rep. Tom Reed (R-NY) today introduced the Reducing Excessive Debt and Unfair Costs of Education (REDUCE) Act to encourage universities to lower costs for all eligible students, regardless of their economic background.
The REDUCE Act also increases transparency in how colleges are spending their money to encourage public pressure on universities to lower the cost of education that has students drowning in debt.
“We should care about the working-class students who are being taken advantage of by the unfair costs of college,” said Rep. Reed. “In most cases, the richer the school, the smaller the percentage of working class students being served by the college.”
“We currently give these schools huge tax breaks and subsidies, and it is time they start serving the working-class taxpayer who supports them,” continued Rep. Reed.
Key provisions of the REDUCE Act include:
• Requires colleges to have a plan to keep tuition increases below the rate of inflation.
• Mandates reporting of easily digestible information about how colleges are being managed and where their money is spent.
• Requires the wealthiest universities to distribute 25 percent of the profits from their massive endowments to assist students from working-class families.
• Encourages university donors to give money that will assist low and middle-income students and eliminates tax deductions for large restricted college donations.
“Having finished my two years at FLCC I was excited to look for schools that fit my needs and desires,” said Ethan who resides in New York’s 23rd congressional district and wished his last name not to be used. “Sadly, nine out of 10 of these schools are so expensive it seems my dreams will be put on hold.
“I am a great Lacrosse player and a good student and there is no amount of money out there in scholarships able to make college affordable for me. I wish the government would put a cap on tuition costs because right now they are out of control. Look at the last president of Hobart College, he made more money than the salary of the President of the United States and tuition was over $53 thousand. This has to change or more good students like me will have their dreams put on hold,” continued Ethan.
"I'm just grateful that my employer has a tuition assistance program because if it didn't, I would have a hard time continuing my education being a husband and a father of three children," Dave Coulter, a resident of Chautauqua County and current student said.
"I appreciate what Tom Reed is doing to lower the cost of college."
Many colleges and universities have accumulated massive, mostly tax-exempt endowment funds. These endowments receive millions of dollars in tax-deductible gifts every year and obtain government subsidies through current tax laws that dwarf anything received by public colleges and universities.
The purpose of these tax exemptions and subsidies is to encourage colleges to distribute the profits from their investments to help offset the costs of attendance. Unfortunately, this has not always been the case. Instead, these schools have amassed billions, and even spent these funds on frivolous items, while ordinary students and their families struggle with a lifetime of crippling student loan debt. This debt has long-term negative consequences for our economy and our future as a nation.