397 days to go… (we’re under 400, folks!!!)

Morning Memo readers! The first Democratic debate is less than a week away, and there’s lots to update you on, so let’s get straight to it. Share this week’s Millennial Memo with your colleagues and friends, and sign up for updates here.

BIDEN WAS “INSTRUMENTAL” IN PASSAGE OF A BILL THAT MADE IT HARDER FOR STUDENT BORROWERS TO GET BANKRUPTCY PROTECTIONS: According to USA Today, “Among the potential trouble spots [for a Biden candidacy] is a 2005 bankruptcy law he championed that made it harder for consumers and students to get protection under bankruptcy… Biden had advocated for the legislation since 1999, when he co-sponsored the Bankruptcy Reform Act. It faced strong opposition from consumer groups that argued it would force people who legally qualify for bankruptcy protection to secure costly lawyers to navigate a maze of additional paperwork requirements. It also made it harder for students to discharge college-related debts. ‘They’ve tended to be predatory businesses that don’t allow a lot of alternatives for repayment,’ said Geoff Walsh, a staff attorney with the National Consumer Law Center. ‘That’s a big problem that’s affected a lot of people.’ While some Democrats, including Sens. Dick Durbin and Edward Kennedy, spoke out against the bill, Congress passed a version of it in 2005 after Republicans increased their majorities. Biden was instrumental to its passage and, along with 17 other Democrats including Obama, voted for it while Clinton did not vote on the final bill.”

CLINTON INVOKES TRUMP IN CRITICISM OF TUITION-FREE COLLEGE PLANS: “Donald Trump’s kids shouldn’t go to college for free, Hillary Clinton said Monday in discussing her plan to eliminate the high cost of college, taking a swipe at the college affordability plan of Vermont Sen. Bernie Sanders. ‘Now, I’m a little different from those who say free college for everybody. I am not in favor of making college free for Donald Trump’s kids. I am in favor of making college free for your grandson by having no debt tuition,’ Clinton told an undecided 71-year-old voter identified as Candy during the event, broadcast live Monday on NBC’s ‘Today.’” (Politico, 10/5/2015)

WAPO OP-ED CREDITS CLINTON HIGHER ED PLAN IN MAKING HER MORE PROGRESSIVE THAN SANDERS: “Once you ramp up taxation for one set of programs, you make it harder to obtain more money for other worthy causes — or, if your ideology allows, to leave the great bulk of national wealth in the private economy. Real progressives seek to show that government can operate smartly, not haphazardly. Real progressives spend money on urgent needs, not on the rich.” (The Washington Post, 10/6/2015)

IN OP-ED, CARSON ENCOURAGED ASPIRING STUDENTS TO WORK TO PAY FOR SCHOOL: “There has been much talk recently about providing free community college education. First of all, it is only free if no one has to pay for it. It is not free if we rob Peter to pay Paul. Secondly, Pell grants already exist to pay for community college expenses for needy students. For those who are not needy, there is an old-fashioned remedy that is very effective called work. In fact work might even be beneficial for those who are needy. It certainly provided some very valuable experiences for me.” (The Washington Times, 2/3/2015)

NEW RESEARCH CASTS DOUBT ON VALUE OF INCOME SHARE AGREEMENTS, PARTICULARLY FOR LOW-INCOME STUDENTS: “A relatively new college funding model designed as an alternative to loans is unlikely to help most students, particularly poor students who need it most, according to a new study… The American Institutes for Research study examines the potential of income share agreements (ISAs) to combat the college loan crisis…Two GOP presidential candidates—Sen. Marco Rubio, R-FL, and Gov. Chris Christie of New Jersey—have touted them in campaign speeches. However, relying upon data from the U.S. Department of Education’s National Center for Education Statistics (NCES) and a review of practices from websites of eight firms that offer ISAs, AIR researchers found that current lending criteria would prevent most students from receiving an ISA. Those criteria limit ISAs mainly to students who are high ability, attend prestigious institutions or major in lucrative fields of study—criteria, in other words, that exclude the bulk of students seeking financial assistance.” (PRWeb, 9/30/2015)

CRUZ HIGHLIGHTS ECONOMIC ANXIETY IN PITCH TO MILLENNIALS: In an appearance at a rural town hall hosted by RFD-TV, Senator Ted Cruz said: “You know, you look at young people now. Young people coming out of school – tragically, economists are referring to this generation of young people as a lost generation, because for six and a half years, young people come out of school and there are no job opportunities.  They’ve got student loans up to their eyeballs. They’re scared. “Am I gonna get a job?  If I do get a job, is it going to be anything where I get skills? Can I work towards a career or is it gonna be a part-time job that’ll last just a little while?” And if we get back to booming growth, what that means for young people is you have two, three, four job opportunities across the spectrum of whatever field.”

POLITIFACT RATES PROFIT ON STUDENT LOANS MESSAGE AS “HALF TRUE”: “Warren said student loans issued by the federal government between 2007 and 2012 are on target ‘to produce $66 billion in profits’ for the government. Warren accurately cites an estimate from a Government Accountability Office report — but that estimate was made with an accounting method that the Congressional Budget Office says is misleading. As the CBO has pointed out in another report, using that accounting method, student loans are projected to generate $135 billion in “profit” from 2015 to 2024 — but using the CBO’s preferred accounting method, they are projected to produce an $88 billion loss. For a statement that is partially accurate but leaves out important details, our rating is Half True.” (Politifact, 10/1/2015)

BUT POLITIFACT ALSO IGNORES DEFICIENCIES OF FAIR VALUE ACCOUNTING: The “preferred method” referenced by Politifact is in fact a new accounting gimmick, called Fair Value Accounting (FVA), being pushed by some members of Congress. Specifically, FVA “would require the.. CBO… and the… OMB… to add an extra amount above what the government expects to spend on loan and guarantee programs. The idea is that because private investors would charge more if they, rather than the federal government, issued loans and loan guarantees (because they tend to fear losses more), the federal government should also charge more… Everyone agrees that the CBO does a good job of accurately reflecting the true costs and benefits of lending and, thus, the overall costs of government programs. That’s because it already accounts for all kinds of risks inherent in federal student loan lending. Indeed, the risk of default is included in the cost of lending, and loans likely to default more than others already cost more, according to CBO. FVA adds an extra penalty on top of that. And here’s why adding that extra… penalty makes no sense: First, the… government is not a private person or a business. It’s true that many private investors psychologically fear big losses more than they value big gains, and as such, they should set their interest rates accordingly… Second, under FVA, the federal government’s revenue and expenditures would become unbalanced… Normally, the sum of all government deficits and surpluses over time adds up to the total debt held by the government. However, FVA would hide the profits the federal government is making off of student loans (and several other loan programs), meaning that the deficits would look much bigger than they actually are.” (Young Invincibles, March 27, 2014)

PAYING MORE FOR STUDENT DEBT THAN GROCERIES?: According to the Associated Press’s Josh Boak: “Student debt is surpassing groceries as a primary expense for many borrowers, with the gap widening most for younger families. The average college-educated head of household under 40 owes $404 a month in student debt payments, according to an AP analysis of Fed data. That’s slightly more than what the government says the average college-educated family spends at the supermarket.”

WHO ARE AMERICA’S STUDENT DEBTORS?: Boak also writes that “school loans increasingly belong to Americans over 40. This group accounts for 35 percent of education debt, up from 25 percent in 2004, according to the New York Federal Reserve. Contributing to this surge: Longer repayment schedules, more midcareer workers returning to school and additional borrowing for children’s education. Generation X adults — those from 35 to 50 years old — owe about as much as people fresh out of college do. Student loan balances average $20,000 for Generation X. Millennials, who are 34 and younger, have roughly the same average debt, according to a report by Pew Charitable Trusts.”

NH- AYOTTE INTRODUCES PRIVATE REFINANCING BILL, BUT CRITICS POUNCE: “Sen. Kelly Ayotte (R-NH) and Sen. Shelley Moore (R-WV) introduced the Student Loan Relief Act of 2015 [last] Thursday, which would let borrowers refinance their federal student loans in the private market. The senators argue that if their legislation passed, students would be able to benefit from lower interest rates… ‘What they’re trying to do is go back to the bad old days of a bank-based loan system. They want private banks to take over the loan and take none of the risk. So what they’re saying is, ‘Oh, it will be good for students because they will get a lower rate from the private market,’’ said Ben Miller, senior director for postsecondary education at the Center for American Progress. ‘But really what’s going to happen is that the private market is going to get a giant windfall and pass along a tiny slice of it to the students in the form of a lower interest rate … You would hope to do a lot more by spending the exact same amount of money and just cutting their interest rates. There is no value add from the private market.’” (ThinkProgress, 10/5/2015)

NH- VIDEO: HASSAN CALLS OUT AYOTTE FOR VOTING TO CUT PELL GRANTS: “The people of New Hampshire need us to bring the New Hampshire way to Washington. Right now, we’ve worked to expand middle class opportunity, especially around education. We froze college tuition for the first time in 25 years and lowered it at our community colleges… Unfortunately, Senator Ayotte has voted… to cut Pell Grants for college students.” (WMUR, 10/5/2015)

OH- PORTMAN FLIPS, SUPPORTS PERKINS: “Congress last week let the federal Perkins student loan program expire, prompting political finger-wagging and claims that Republicans such as Ohio’s Rob Portman finally got his way… According to a Bush budget request that Portman oversaw, analysts had determined that ‘this program is duplicative of the direct and guaranteed student loan programs and is not well targeted to the neediest students’… Ohio Democrats say that with the recent Perkins expiration, Portman has helped achieve his Bush-era dream… But here’s the thing about Portman and the recent Perkins loan program expiration: Portman spoke on the Senate floor last week to urge the Perkins program’s continuation. Portman praised the program as ‘strong and one that works.’ “I agree that this program, like just about every other program in the federal government, can be improved, and that should be part of our work here,” he said in his floor speech. ‘We should be reforming these programs so that they are more efficient, more cost-effective and getting to the folks who really need the program the most.’ But allowing the loan program to expire would punish students, Portman said, rather than force lawmakers to make the necessary reforms.” (Cleveland Plain Dealer, 10/4/2015)

MEASURING UP MILLENNIALS: Donald Trump’s numbers may be starting to decline, but not among younger Republican primary voters. A new poll of Republican primary voters from Public Policy Polling finds Donald Trump leading among Republican Primary voters aged 18 to 45 with 32%. The rest of the field’s support among 18 to 45 year-olds is as follows: Bush 13%, Carson and Rubio 12%, Cruz and Fiorina 6%, Kasich and Jindal 3%, Santorum and Paul 2%, Christie/Graham/Huckabee/Pataki 1%.

As for the Democrats, a new PPP poll finds Clinton leading Sanders and Biden 42%-24%-20% respectively; however, she is tied with Sanders among 18 to 45 year-old Democratic Primary voters.

The rise of the covert for-profit college, The Washington Post, Danielle Douglas-Gabriel

Tennessee Promise ups enrollment at Chattanooga State, Cleveland State, The Times Free Press, Kendi Anderson

5 Things Colleges Should Know About the New Secretary of Education, The Chronicle of Higher Education, Kelly Field