Mike Bloomberg Releases Higher Education Plan

Presidential Candidate Mike Bloomberg releases his higher education plan.

The 2020 Democratic Presidential Primary has been one full of candidates releasing various policy plans they hope to enact as president. One of the areas where almost all candidates have introduced plans is higher education. Those plans have been the topic of ads and have even made their way on to the debate stage. Former New York City Mayor Michael Bloomberg, the latest candidate to join the race, released his plan today to address higher education. Bloomberg’s plan addresses a number of aspects of higher education including cost, admissions, and quality.

While former Vice President Biden and Senator Klobuchar focused on making community colleges tuition-free, Bloomberg went a little further when it comes to affordability. However, he stops short of going as far as former Mayor Pete Buttigieg. Bloomberg would make all community colleges tuition-free and pledges to make four-year public institutions debt-free for the lowest-income students.

Low-income students at community colleges would also essentially get a debt-free education because he—like Biden and Klobuchar—pledges to double the value of the Pell Grant. Those students would be able use their Pell Grant to pay for their living expenses. This is the same way he would make four-year institutions debt-free for the lowest-income students.

Bloomberg also pledges to make public four-year colleges more affordable for all Americans, though he doesn’t address exactly what that means. Like most “free college plans” he utilizes a a federal-state partnership, where the federal government would provide money to states based on their contribution with their agreement to make community colleges tuition-free for everyone, eliminate tuition at public four-year schools for the lowest income students, and reduce the cost of higher education for all Americans.

Often the conversation around higher education is focused on cost—for good reason—but focusing on cost alone misses the important conversation around quality in higher education. And that doesn’t mean the same thing as in K-12 education. Approximately half of students who start higher education, do not graduate with a degree. Like other candidates this year, Bloomberg considers quality. Bloomberg calls for community colleges to invest in evidence-based strategies to improve degree completion and promoting transfer to four-year schools. His plan calls for an innovation fund and other investments to improve quality in higher education.

Outside of costs on the front end, Bloomberg’s plan addresses student loan repayment. Like Biden, he cuts the payment someone makes under their income-based repayment plan in half. Currently, a borrower in these plans pays 10% of their discretionary income—defined as their income above 150% of the federal poverty line. Both Bloomberg and Biden cut that to 5%. However, Biden’s plan is more generous because he raises the threshold of what is considered discretionary income to $25,000.

Both also make an important change from how the program operates today, as did Buttigieg. Under current law, after the end of repayment any remaining balance is forgiven but that forgiveness is considered taxable income. All three make that forgiveness not taxable. Bloomberg limits the forgiveness though to undergraduate debt. This means a lot of borrowers with graduate debt would lose the forgiveness. Just last week the Congressional Budget Office released new cost estimates for income-driven repayment plans and found that graduate borrowers would receive most of the benefit. Interesting, Bloomberg does not say that he will limit the amount forgiven under Public Service Loan Forgiveness to just undergraduate debt.

This new higher education plan does a lot more outside of costs and loans. Bloomberg calls for the passage of the bipartisan College Transparency Act to provide transparency to students and families. Bloomberg’s plan is very focused on improving student outcomes, as previously mentioned. He also calls for reinstating the gainful employment rule from the Obama Administration among other ideas.

One of the more interesting pieces of his plans is the elimination of legacy admissions. Some think there is no federal role in this; others believe it would be hard to accomplish. Either way, it is sure to drive a conversation and would be a step towards making our higher education system more equitable.