But Clinton doesn't go quite as far as some more liberal politicians and party activists, who've made "debt- free college" an early litmus test for the presidential primary field. In May, Vermont Sen. Bernie Sanders released his own plan that would eliminate tuition and fees for public universities. The $70 billion annual proposal would be funded by imposing a tax on transactions by hedge funds, investment houses and other Wall Street firms.
While military veterans, lower-income students and those who complete a national service program, like AmeriCorps, would go to school for free in the Clinton plan, others would incur costs for their schooling and living expenses at four-year public universities. "For many students, it would translate into debt-free tuition," said Carmel Martin, executive vice president for policy at the Center for American Progress, who advised Clinton on the plan. "It will depend on the student circumstances and the institution they are going to."
For most students, their families will still be expected to make a "realistic" contribution, say Clinton's aides, and students will contribute wages from 10 hours of work per week.
Those currently repaying loans would be able to refinance their outstanding debt at lower rates, a change Clinton's aides say will save an average of $2,000 for 25 million borrowers over the life of the loan—an amount that's equal to just about $17 month over a 10-year repayment period. She would also expand income-based repayment programs, allowing every student borrower to enroll in a plan that would cap their payments at 10 percent of their income with remaining debt forgiven after 20 years.
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Private universities with "modest endowments" that serve a higher percentage of low-income students, including historically black colleges, would also receive federal funds to help lower the costs of attendance and improve graduation rates.
The cost of Clinton's plan would be offset by capping itemized tax deductions for wealthy families at 28 percent, like those taken by high-income taxpayers for charitable contributions and mortgage interest. That proposal, which has long been included in President Barack Obama's annual budget, would raise more than $600 billion in the next decade, according to the Treasury Department.