Amid ballooning costs, college and the means to pay for it are turning into a potential bubble and national problem that could disrupt economic stability. As a result, the major political parties have both come out with definitive plans to get the problem under control. However, the politicians tasked with tackling burgeoning student debt have divergent opinions on how best to do that.
In 2013, the amount of money student loan borrowers owed the federal government crossed the $1 trillion threshold for the first time, according to the Consumer Financial Protection Bureau. For the class of 2016, the average student graduated with $37,172 in loan debt.
On Friday, the Republican National Committee released its official stance on the student loan issue. The solution, according to the GOP's best thinkers, is for the government to get out of the business of providing student loans and leave loan origination to the banks.
"The federal government should not be in the business of originating student loans. In order to bring down college costs and give students access to a multitude of financing options, private-sector participation in student financing should be restored," the party's official platform stated.
That stance is a repudiation of the 2010 federal legislation that scaled back the role of private lenders providing student loans. The banks now act as middlemen, collecting fees and keeping records while students go through federal channels to secure the loans.
However, the federal government has also taken steps to provide relief for borrowers in recent years as the interest rate on federal loans for undergraduate students dropped to 3.76% in 2016 from 4.29% in 2015. The government also adjusted the maximum Pell grant amount for inflation to $5,815 from $5,775 last year. Pell grants are used by nearly 8 million lower-income students in the country.
On the opposite end of the political spectrum, Democrats have been kicking around ideas for the federal government to shoulder the full burden of the cost of public universities for students.
Democratic presidential candidate Hillary Clinton recently released her campaign's college financing plan. The main tenets of her plan aim to allow students from families making up to $125,000 annually to go to school without having to incur any debt. Another tenet states that all community colleges will offer free tuition.
"Let's ... make debt-free college available to everyone. And let's liberate the millions of Americans who already have student debt," Clinton has been quoted as saying.
Should Clinton win November's election, how the government plans to pay for that initiative is sure to be the subject of much congressional debate, but what people on both sides of the aisle have begun to realize is that the current system is unsustainable. Change seems to be coming, but the form that change takes will rest on who takes the oath of office next year.
Editor's Note: This article was originally published at 4:58 p.m. EDT on Real Money on July 26.