Vermont socialist and presidential candidate Bernie Sanders recently introduced a bill to eliminate undergraduate tuition at public colleges and universities. His College for All Act would also reduce interest rates on federal student loans and allow graduates a refinance their loans at these lower rates, thereby “stopping the government from making profits on student loans.” The stated cost of the bill would be $300 billion annually, which would supposedly be financed by instituting 0.5% and 0.1% taxes on trades of stocks and bonds respectively, as well as a smaller fee on derivatives, including stock options and futures contracts.
Sanders has virtually no chance of winning the Democrat primary, but a lighter version of his bill could get some traction from those on the left—and possibly some swing voters who buy the notion that this would be an “investment in America,” so it’s worth debunking at the outset.
As for the interest rate proposal, the federal government nationalized the college loan industry in 2010, a move Sanders supported. If there’s any profit in the student loan business, the federal government is only getting it because it took over the system. The easiest way to keep this from happening is to privatize, but this wouldn’t make the left happy either. The problem is profit. In a socialist’s world, it’s evil. Governments determine production, pricing, and wages so that “market distortions” are eliminated and everything is “fair.” This ideological point aside, we’re hearing more calls to “do something about the $1.2 trillion in student loan debt,” which really means transferring some or all of it from those who willingly borrowed the money to those who did not. Like others of his ilk, Sanders would really like to dissolve most or all of debt, not just tinker with the interest rate.
There are many problems with his free college tuition proposal as well, aside from the fact that the federal government has no constitutional authority to pass it anyway. Costs of public institutions vary widely among the states in part because of the amount of funds state governments allocate. If the federal government is going to pick up the tab, then state governments have an incentive to spend less on their own, effectively turning over the entire college funding process to Washington.
Moreover, not every student needs to go to college or is ready to do so upon graduating from high school. The return on investment for any college decision depends on individual factors. Motivation is a very important one, but less of it is required when someone else is paying the bill. In fact, free college would be viewed as an easier alternative to many jobs one might get out of high school, effectively promoting a college education to those for whom it is not intended.
It’s also important to consider Sanders’ funding mechanism. His proposed taxes on stock trades sounds like a tax hike on the wealthy, but it would be counterproductive to the economy. Investors should be encouraged to move their funds into investments with the most potential. Like a capital gains tax, a levy on stock trades encourage investors to hold funds in questionable assets rather than pay the expense. This is a surefire way to stunt growth.
There is an irony here. Part of the occupy protests was based on the notion that many college graduates have incurred large amounts of debt but are struggling to find employment in their majors. Indeed, many have been deceived by a mantra that encourages college at any cost, so I have some degree of sympathy. Nonetheless, if many current graduates are unable to find good jobs—something leftist supporters of the movement parroted throughout the protests—then why should the government “invest” in more graduates? They wouldn’t owe tuition individually under Sander’s plan, but taxpayers collectively would incur the debt.
There are many other reasons why free college education is a bad idea; in fact, I can’t really think of a reason to support it. Perhaps you might expect me—as a professor at a state-supported university—to favor such a proposal because it would infuse federal dollars and expand the industry, but it’s just not a good idea for anyone.
There are many problems with his free college tuition proposal as well, aside from the fact that the federal government has no constitutional authority to pass it anyway.
Does anything else need to be said? The government is not a bank, they SHOULD NOT be making student loans…PERIOD! It is another form of control. Every single “blanking” thing we do everyday involves some form of government. Is it truly Death by a Thousand Cuts. Civil war by 2020.
BUT THIS IS AN INVESTMENT. IMAGINE THE ECONOMY THAT WOULD EXIST WITH MORE COLLEGE GRADUATES.
Studies prove that college graduates earn more than non graduates. They earn more because their value is higher (no free LUNCH) and they contribute more to the business and the economy.
Let’s assume both of your statements are correct. My argument still stands, the government is not a bank! For every college graduate earning more than a non, I can show you 2 college graduates who are dirt poor and paying back student loans from 10 years ago. You know who is good at lending money?? Banks!! You know who is terrible at everything?? The Government!! I am already paying top dollar in taxes for a failing K-12 system, why would I pay even more for more for your “Women’s Studies” degree??
SO HOW DO WE FUND COLLEGE IF GOVERNMENT DOESN’T DO IT? THE COST IS TOO HIGH FOR WORKING AMERICANS
First off, colleges are in the business of making money, not educating people. How come I have to re-take English 101 in Oregon if I already took it in California?? Tuition costs are criminally high. Why is this, because people can get cheap loans for the government and pay. Then, when they get their lovely piece of paper, they get to spend the next several years trying to pay off the loan. There are dozens of worthless degrees out there that people continue to get (Business, Communications, Fill in the blank Studies, Humanities, Sociology, History, Broadcasting, etc).
To your question ERIS, they can get a loan from a bank, the government is not a bank, nor do they have the constitutional right to be one. Work hard in K-12 and get a scholarship, join the military like I did, got training for the job I do now AND the GI Bill. Save money, you don’t need a new iPhone every 6 months. Don’t have 5 kids if you can’t afford it. I am tired of paying for other peoples poor choices.
It’s survival of the fittest out there, as it should be. I take care of me and my family. Neither I, nor the government (still meaning me) take care of yours because we are forced to do so.
Imagine a world without music, theater, poetry, literature, arts, philosophy…..
I don’t think I would like that world…I pay for it when I go to see it. Does one really need a degree in any of those to be good, or to make a living? Doubtful. Look at today’s pop star millionaires, degrees in music theory?? Where did Taylor Swift go to school? Philosophy is about the open exchange of ideas, why is a degree needed for that? What university did Plato attend? Again you are missing the point…if a college wants to issue a degree in fine arts, I should not have to fund it, the government should be loaning you money for it, and if you get that mighty fine piece of paper YOU need to find a job where that it desired, good luck with that.
College worked well when the majority of people got degrees in practical things like business, education, health, engineering, etc…. Those that got liberal arts degrees for their own personal enrichment did not expect that the world owed them a job and that someone else had to pay the bill. People made sacrifices and worked hard. Now everyone expects to jump right to the front of the line.