WHEREAS:

            Americans owe $1.2 trillion in student loan debt, a number that has tripled in the last decade as higher education costs have soared. Student loans have surpassed credit cards and auto loans to become the second biggest source of personal debt in the U.S., trailing only mortgages. Student loan debts are 6 percent of the overall national debt; and

WHEREAS:

            The class of 2014 is the most indebted class ever.  The average 2014 graduate with student-loan debt has to pay back $33,000.  Even after adjusting for inflation, that’s nearly double the amount borrowers had to pay back 20 years ago; and

WHEREAS:

            Since 1981, the Consumer Price Index has risen 261 percent while the cost of public university tuition and fees has increased 384 percent.  Just since the 2007 school year, public university costs increased by over 27 percent after inflation. The University of California has increased its tuition rates by over 70 percent during this period. Student aid has not kept up and Pell grants cover less and less of the cost; and

WHEREAS:

            Since the Great Recession, public colleges and universities across the country have increased tuition to compensate for declining state funding and rising costs. The percentage of education revenue derived from student tuition has doubled in the past 25 years. These increases have reduced college affordability and shifted costs from states to students and their parents.  Attaining a college degree is now out of reach for many high school graduates; and

WHEREAS:

            A college education is more important than ever and critical for today’s workforce. According to a study from MIT, the growing skills gap among the 99 percent is even more consequential than the rise of the 1 percent for most citizens. The wage differential between college and high school graduates is higher than it has ever been and the lifetime earnings differential has grown by a quarter-million dollars in the past 45 years. The Federal Reserve Bank of San Francisco calculates that the average U.S. college graduate can expect to earn at least $800,000 more than the average high-school graduate over a lifetime; and

WHEREAS:

            There are programs, such as Income-Based Repayment and Pay As You Earn, which link college loan repayment to graduates’ incomes and even forgive some debt.  These programs allow borrowers to make smaller payments and after 20 or 25 years forgive the remaining debt. Workers in the public or non-profit sectors can obtain debt forgiveness after 10 years. These two programs now serve 1.3 million people who owe a combined $72 billion, but they are not enough; and

WHEREAS:

            Arguments are swirling about whether or not the federal government makes profits on student loans.  To the extent there are any profits, they should be used to benefit students. Various legislative proposals would facilitate refinancing student debt, reducing interest rates, and create loan forgiveness programs in exchange for public service; and

WHEREAS:

            The Department of Education has a contract with Navient, spun off from Sallie Mae in April, to collect monthly student loan payments. The contract is up for renewal. Sallie Mae and Navient reached an agreement with the Justice Department and the Federal Deposit Insurance Corporation in May to pay $97 million to settle charges that they overcharged military members and imposed excessive fees.  The Consumer Financial Protection Bureau is conducting its own investigation.  In spite of this, the Education Department has announced its intention to renew the contract; and

WHEREAS:

            States are exploring ways to make college education affordable.  A law passed in Tennessee this year promises free community college tuition to every high school graduate in the state, financed from lottery funds.  Several cities have similar programs. Oregon passed a law to study making tuition free at its community colleges.

THEREFORE BE IT RESOLVED:  

            Student loans must be more affordable.  AFSCME supports the Bank on Students Emergency Loan Refinancing Act, the Federal Student Loan Refinancing Act and similar legislation to allow students with outstanding loans to refinance at lower rates. In addition, there should be clear limits on the percentage of income borrowers must use in loan repayment and how long they must bear it. Pay As You Earn, Income Based Repayment and similar plans should provide even greater benefits for those called to the public service with expanded opportunities for loan forgiveness and subsidized interest rates; and

BE IT FURTHER RESOLVED:

            AFSCME knew 10 years ago that Sallie Mae had lost sight of its mission when it contracted out student loan call centers to India.  We led the way in having them removed from the Union Plus/AFSCME Member Benefits program.  Now we join with the AFL-CIO, the United Students Association and other groups in calling for the Sallie Mae/Navient loan servicing contract with the Education Department to be terminated.  No organization that breaks the law and overcharges service members should be rewarded; and

BE IT FURTHER RESOLVED:

            That AFSCME shall continue to seek an appropriate low cost student debt refinancing and consolidation option for its members and their families, the intention of which would be to offer interest rates as low as possible, aiming for half the national average rate for this type of loan; and

BE IT FURTHER RESOLVED:

            AFSCME supports efforts to make college affordable for all and for reversal of federal, state and local government reductions in higher education support.  We remember when higher education in California was free for all and the City University of New York charged no tuition. We support programs, like the one in Tennessee, to return to these days and make college free for all high school graduates; and

BE IT FURTHER RESOLVED:

            That regular updates be made available to all members describing strategy, challenges and progress made on establishment of the member benefit program; and

BE IT FINALLY RESOLVED:

            That an avenue be provided through the AFSCME website for members to submit ideas, comments and questions on how we as a union can engage with the issue of student debt.