Daily News: Get excited about your college plan now.

Clinton: Yeah, I’m very excited about my college plan.

Daily News: Make me understand it…..

Clinton: …The best way to do that is to ask, “Okay, what’s the problem?” Here’s the problem. States have been disinvesting in higher education now for 20 years but at an accelerating pace for 10 years. So that the flagship higher education systems in California, in New York, in Michigan, other places have been under increasing pressure because states have diverted money to other purposes. Building prisons has taken a lot of state dollars, and I think we should end building any more prisons. I think we need to be focused on moving people out of prison and diverting them in the first place. But we have to figure out how we get states, once again, to invest, because tuition has gone up 42% in the last 10 years. Nothing else has gone up that fast.

So you’re putting families and young people in an increasingly untenable position. So I have what I call the New College Compact. And it takes federal dollars to use basically as the incentive for states to join with the federal government in providing debt-free tuition for middle-class, working and poor families. I will not make it free the way my opponent, Sen. Sanders, has offered, for two big reasons.

First, I want not only to incentivize states to reinvest in higher education. I want to incentivize colleges and universities to take a hard look at their costs, because I do think that there needs to be a rigorous analysis. You know, one of the complaints that I think students rightly make is every student pays for athletic facilities. It may be required to buy tickets that they will never use. We need to take a hard look at what’s going into the base for the tuition that the average student has to pay. So if you say it’s free, I mean that’s like, take the pressure off, okay?

Daily News: Describe the flow of the money now from Washington to New York, for instance.

Clinton: Okay, let me finish. I get excited. Okay, so you’ve got the states, you’ve got the institutions and you’ve got the families, and then students who want to take advantage of debt-free tuition have to agree to work 10 hours a week. It’s work-study at the college or university, because a couple of public institutions — Arizona State University being a prime example — have lowered their costs by using students for a lot of the work. Yes, it’s free. It’s in effect in exchange for lower tuition. So I want that to be part of the deal.

So the federal government would hold out this promise. And I think states with Democratic governors like New York or California would accept it.

Daily News: But the promise is what? That federal government would give what?

Clinton: Would ensure that as students are accepted into public colleges and universities, they would submit an application that included their family income and resources, and below a certain level, they would be told, “Okay, you can afford this much, x amount, to pay for your tuition, but you can’t afford any more than that. We will make up the difference.” And some people will be told, “You can’t afford any of it, so we will pay. So you do not have to borrow any money whatsoever to go to school.”

But it would be better, it would work better, if the states were also reinvesting. And so part of the compact is to encourage the states to do that by saying, “We got a great deal for your students, but we’re going to request that you put more money in. And by the way, colleges and universities, I don’t see how you’re going to tell your students they can’t be eligible but we want you to engage in the hard analysis of what you are charging your students.”

Daily News: Okay, well, right now, you go through the financial aid process and…

Clinton: Right, and it’s too long, and too messy, and yeah.

Daily News: And students and families fill out a form, and then they’re told what they can afford.

Clinton: Yeah, but here’s the difference, Arthur. They are told, “You are eligible for this kind of aid.” The aid comes with usually an interest rate that is often above market level, number one. The aid is very often not in any way going to help them if they can afford through the aid to have tuition, but they get no help on the expense side. So I am also offering help on the expense side for young people who need it.

So we’ve got this perfect storm. They go through this long, burdensome process, and they often end up being told, “Well, you can borrow x amount at this rate.” They borrow x amount at this rate, but there’s no guarantee that the rate stays the same. We are eliminating that.

Daily News: But after you’ve decided for an individual student, this is what this student or the student’s family should be able to afford, will the government be making a grant on top of that? It’s not a loan.

Clinton: It’s not a loan.

Daily News: So if somebody says, “You can afford $,1000 and tuition is $4,000…”

Clinton: We pay three.

Daily News: You pay three.

Clinton: We pay three. Now what I want to do is look at all of the available financial assistance that’s out there, because we can combine with state grant programs or institutional grant programs.

But here’s what I also feel really strongly about is as you’re looking at this…you know, when I taught at the University of Arkansas Law School, tuition was very low, but there were a lot of poor kids. And a lot of poor kids could scrape the money together for tuition, but their whole education was dependent upon keeping all the other costs affordable.

So they lived out in the country, and they had an old clunker car. And the car broke down. There was no mass transit. People were stuck. And for the lack of $300, they were out of luck, because they couldn’t get to classes, or if they were a single parent, the scholarship, I mean the child-care money was no longer affordable, or whatever their problem might be. So I started something called the Arkansas Single Parent Scholarship Fund to fund those expenses that were not tuition, but were room, board, books, but also these unexpected…and so I want to move Pell Grants so that they can be used for non-tuition expenses. So this whole package will lead to debt-free tuition.

But here’s the final point I want to make, why I feel absolutely committed to this. If you look at the data, and I know you do look at data, if you’re a young person in the bottom quartile of income right now, in America, you have a lesser chance of starting and completing college than someone in the same position did 30 years ago. Even if you’re a top student, if your grades are good, if your test scores are good. And we are just shrinking the pipeline. If we’re supposed to be a meritocracy, then let’s get back to helping people who deserve it. And I am not going to pay for my granddaughter. I’m not going to pay for Donald Trump’s children or grandchildren. I’m going to focus on middle-class, working and poor families. And that’s where I think we need to be lifting those young people up.

Now the other thing I want to quickly say because I also feel strongly about this. We do need to try to get the cost of community college as close to free as possible. And the President made a proposal about that. I think he’s on the right track on that, because a lot of young people, especially starting in high school, go to community college programs and actually acquire college credits as well as credentials. Maybe it’s a credential as a machinist or maybe it’s college credits so you can start as a junior and save the money that you would have otherwise spent in your freshman or sophomore years.