Schools Need More Skin In The Game For Student Outcomes
Instead of forcing students to borrow from the private markets or the government, would it be possible for schools to self-finance their students tuition? For instance, a school could agree to lend the student money, and in return the student pays x% of their salary after graduation until the initial principal plus interest has been paid off. This would give the schools a very, very strong incentive to make sure they are preparing their graduates to excel in the workplace after graduation. If enough schools adopted this method of financing, it would put downward pressure on student loan interest rates, making sure that student are never taken advantage of by student loans again.
The status quo methods of college financing need to change. According to the Fed, schools will simply continue to raise tuition rates so long as they know students have unlimited borrowing capability. And as schools continue to spend, the associated overhead costs will be impossible to cut when the time comes.
Sanders And Top Progressives Push To Make College Free For Most Americans
Sen. Bernie Sanders, I-Vt., and the chair of the Congressional Progressive Caucus, Rep. Pramila Jayapal, D-Wash., are proposing free college tuition for those from families earning up to $125,000 per year.hide caption
Sen. Bernie Sanders, I-Vt., and the chair of the Congressional Progressive Caucus, Rep. Pramila Jayapal, D-Wash., are proposing free college tuition for those from families earning up to $125,000 per year.
Sen. Bernie Sanders, I-Vt., and the chair of the Congressional Progressive Caucus, Rep. Pramila Jayapal, D-Wash., are introducing legislation Wednesday that would make higher education free for most Americans by imposing new taxes on many Wall Street transactions.
The legislation would eliminate tuition and fees at public, four-year institutions for those from families earning up to $125,000 per year and make community college free for everyone. The push comes amid mounting pressure from progressives on President Biden to forgive some existing student loan debt and make higher education more accessible.
“While President Biden can and should immediately cancel student debt for millions of borrowers, Congress must ensure that working families never have to take out these crushing loans to receive a higher education in the first place,” Jayapal said in a statement.
Free College Bill Proposed By Bernie Sanders
The largest student loan cancellation and free college plan in history could be on the way.
Sen. Bernie Sanders and Rep. Pramila Jayapal proposed Wednesday the College for All Act. The bill would make community college free to everyone make public four-year colleges and universities tuition-free for all students from families earning less than $125,000 a year and double the Pell Grant to almost $13,000.
Doubling Pell Grants would allow students to use the funds to cover living and non-tuition expenses like books and housing and expands grant eligibility to undocumented students.
Sanders said the Act is the largest investment in federal education in modern history and rivals the Higher Education Act of 1965.
The proposed Act would also guarantee students from families earning under $125,000 a year to attend tuition-free and debt-free Historically Black Colleges and Universities and Minority-Serving Institutions. It would also provide an annual $10 billion federal investment to cover student support programs at these under-funded institutions.
Millions of student loan borrowers collectively hold $1.7 trillion of student loan debt.
In the wealthiest country in the history of the world, a higher education should be a right for all, not a privilege for the few, Sanders said, according to Forbes.
The federal government would also aid 75% of the cost of free college at public schools, and states would pay 25%.
Need Help With Your Student Loans
No matter what happens with Bernies Presidential Election run, one thing I do want to make eminently clear is that there are all sorts of excellent student loan relief programs already on offer!
In fact, this website hosts over 100 different Guides on the many Federal and Private student loan debt programs currently available, so if youre struggling to deal with your loans, make sure to take a look through some of the following links.
No matter how much you owe, what type of debt you have, or how long youve been in delinquency or default, youre almost certain to find some value from the Guides Ive linked to above.
For any other questions that you might have about student loans, please feel free to ask them in the Comments section at the bottom of this page.
Just make sure to tell me if you have Federal or Private loans, because thatll determine which relief programs you have access to.
Let Americans Refinance Student Loan Debt At Historic Low Interest Rates
As outlined above, interest rates are what make student loan debt such a problem, so this tenet of the Sanders plan is perhaps the most important.
In the history of the United States of America, there has never been a better time to borrow money, because the prevailing interest rate is lower than its ever been before.
Have you heard about people getting 30 year mortgages with an interest rate of just 3%? Are you aware that people are getting auto loans with 0% interest?
Could you imagine how much money youd save on your monthly student loan payments if you were able to refinance your loans to a similar rate?
Federal student loans currently come with an interest around 5-7%, which is significantly higher than what could be provided, especially considering how cheap it is to borrow money for other high-value purchases like homes, cars, etc.
And while youre allowed to change your Federal Student Loan Repayment Plan to rearrange the structure of how long itll take you to pay off your loans, choosing even increments, payments based on annual income, and a number of other variables, theres no option for changing your loans interest rate.
Unfortunately, the interest rate is the most important component of the calculation that determines how much youll end up paying over the life of your loan, so its the single most important factor for helping you get out of debt!
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It Might Not Cover Room And Board
Legislation proposed by Sanders last year would cover tuition and required fees.
But at some colleges, it’s room and board that hits your wallet the hardest. Students at public colleges paid an average of $14,000 this year, but only about $4,000 of that went to tuition, according to The College Board. The other $10,000 covered room and board.
While that costs isn’t automatically wiped away, Sanders doesn’t want students to have to borrow money to pay for room and board, books and other living expenses. If it’s determined that those cost more than what your family can pay, you’ll get federal, state or college grants to cover the cost.
Make Tuition Free At Public Colleges And Universities
Bernies proposal to make tuition free at all public colleges and universities is not an entirely new idea.
In fact, its based on the historic precedent set by Germany, who eliminated college tuition entirely because they believed that the $1,300 annual fee they were requiring for attending college was discouraging their people from receiving higher education.
Could you imagine how many more Americans would be able to go to college if it only cost $1,300 a year? Just think about how much more discretionary income you would have if your total student loan costs were based on a $1,300 per year tuition rate.
In an economy powered by consumer spending, how much more money would be getting pumped back into housing, transportation, and consumer goods, rather than getting funneled into the pockets of bankers and corporations, who do little but hoard the cash for their own self-interest?
And just so you realize that Bernie is not alone in this measure, its also reported that Chile is about to make college free for its citizens next year, and that Finland, Norway, Sweden and several other countries have been offering the same to their citizens for many years.
Bernie asks: if these countries can afford to make college free for their citizens, then why cant the United States?
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Bernie Sanders Introduces Bill To Make College Free For Millions
Vermont Sen. Bernie Sanders introduced a bill Wednesday to make college tuition completely free for families earning less than $125,000 per year paid for by a tax on Wall Street transactions that would haul in $2.4 trillion over a decade.
Sanders has introduced similar legislation for years, and touted it as a presidential candidate for the Democratic nomination. This time, his proposal comes with Democrat Joe Biden in the White House and following negotiations of a Biden-Sanders Unity Task Force meant to bring wings of the party together after a divisive 2020 primary.
‘In the wealthiest country in the history of the world, a higher education should be a right for all, not a privilege for the few,’ Sanders, a Vermont Independent, said in a statement.
‘If we are going to have the kind of standard of living that the American people deserve, we need to have the best educated workforce in the world. It is absolutely unacceptable that hundreds of thousands of bright young Americans do not get a higher education each year, not because they are unqualified, but because their family does not have enough money.’
The bill is cosponsored by liberal firebrand Sen. Elizabeth Warren of Massachusetts but also by Sens. Alex Padilla , Chris Murphy , Kirsten Gillibrand , Patrick Leahy , Jeff Merkley and Edward Markey .
The lead sponsor in the House is Rep. Pramila Jayapal.
What The College For All Plan Means For Students
Prospective students and their families should not expect the bill to pass exactly as proposed, if it passes at all. “Often, the details are a lot different than the summary sheets you read initially,” Kantrowitz says. And even if the bill does pass, “most likely, it won’t be effective until the 2022/2023 year at the earliest.”
Students or families of students who are applying to colleges this year should operate under the assumption that they will have to pay college tuition, Mayotte says.
“Nobody should be making any decisions based on these proposals right now,” she says. “It is way too early in the process to make a decision either way.”
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Would Taxes Go Up To Pay For ‘free College’
Sanders and Jayapal’s proposal calls for the federal government to shoulder 75% of the cost of free college at public schools, with states paying the remainder. Should there be an economic downturn, the federal government’s share would increase to 90%.
Sanders says the plan will be paid for by a tax on Wall Street. A separate bill, called the Tax on Wall Street Speculation Act, proposes a 0.5% tax on stock trades, a 0.1% tax on bonds and a 0.005% tax on derivatives.
The proposed tax might be “more palatable” to conservatives than previous proposals, which called for taxing the top 1% of earners, says Betsy Mayotte, president of The Institute of Student Loan Advisors.
“It’s all going to hinge on how feel about the method of payment for the proposal,” she says. “I think it’s hard for either side of the aisle to push back on a proposal that maintains access and affordability to higher education without accruing debt.”
The bill is more likely to pass this year than in previous sessions of Congress.Mark Kantrowitzhigher education expert
Democrats are pushing a number of legislative priorities this year, from infrastructure to climate change to voting rights. The proposal could live or die based on which other bills they prioritize and whether proposed tax increases like the Wall Street tax can cover the costs of the many bills on the Senate floor, Kantrowitz says.
Nprs Assessment Of The Sanders Free College Plan
It could be argued that NPR is one of the most Fair & Balanced news sources currently available to ordinary Americans, so I want to include a review of their appraisal of Senator Sanderss plan.
Assuming that Bernie is able to get all six tenets of his proposal enacted, how does NPR think things will turn out for the country? In short, theyve completely missed the point!
In a recent article titled Fact-Check: Bernie Sanders Promises Free College. Will it Work?, NPR slams the Sanders Plan, stating that it is unlikely to give the United States the most educated workforce in the world.
But is that really the point? Does anyone even believe that the motivation behind Bernie Sanderss plan is to make America the most educated? Cant we all agree that this has little to do with actual education, and far more to do with excessive student loan debt?
Feel free to check out their article by clicking through the link above, but remember that like many of the other Media outlets currently analyzing the Sanders Free College Plan, even NPR has failed to understand the genesis behind Bernies proposal.
This plan is not about creating a highly educated workforce, which would be better served by enacting major education reforms, and getting away from an educational system that was developed while the workforce still sat in factories performing repetitive behaviors to produce manufactured goods, and which is now completely outdated to the needs of modern companies and businesses.
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Bernie Believes Student Loan Interest Rates Need To Be Drastically Reduced
In a speech at Johnson State College in Vermont, Bernie said, We must fundamentally restructure our student loan program. It makes no sense that students and their parents are forced to pay interest rates for higher education loans that are much higher than they pay for car loans or housing mortgages. We must also end the practice of the government making $127 billion over the next decade in profits from student loans.
This Would Politicize Higher Education
We can all agree there are problems with the operating budgets of colleges. But our elected officials in Washington DC have such a great track record of managing budgets that we should obviously extend their reach to our higher education system as well, right?
DC is doing such a great job, we should entrust them with more-No one ever
Our entire system of government is based on balance of power between institutions. When someone you support is in a position of power, youre happy. But Presidents are only guaranteed for 4 years, Congressmen and Congresswomen 2 years, and Senators 6 years. Bernie Sanders plan gives all future Presidents those you agree with as well as those you dont an enormous amount of power over the higher education system. Right now, majority of decisions on higher education are handled by individual state governments. Bringing the federal government into higher education is not just injecting more politics into the higher education system, but itll ensure instability every election cycle.
There are certainly positive reforms to be enacted to improve the cost and quality of higher education in America, but let the state governments handle that. Let the states compete for students. Thats the only way to begin addressing the quality and cost issues. Bernies plan does the exact opposite.
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News: Sanders Jayapal And Colleagues Introduce Legislation To Make College Tuition
100+ Grassroots Groups and Unions Support Legislation Modeled on Biden Campaign Plan
WASHINGTON, April 21 Sen. Bernie Sanders and Rep. Pramila Jayapal Wednesday introduced the College for All Act to open up the dream of a college degree to millions of working-class children. The legislation would make the most substantial federal investment in higher education in the modern history of the United States and its transformative potential is on par with President Lyndon B. Johnsons Higher Education Act of 1965.
While the Biden Administration reviews how much student debt the president can cancel without Congress, the College for All Act will end the debt spiral in which too many working families find themselves. The bill is modeled directly after the Biden-Sanders Unity Task Force proposal and the Plan for Education Beyond High School that President Biden campaigned on.
While President Biden can and should immediately cancel student debt for millions of borrowers, Congress must ensure that working families never have to take out these crushing loans to receive a higher education in the first place, Rep. Jayapal said. The College for All Act will free students from a lifetime of debt, invest in working people, and transform higher education across America by making community college free for everyone and eliminating tuition and fees at public colleges and universities for families making up to $125,000.
My Thoughts On Bernies Plan
If youre like me, you might have even had to take a deep breath after reading through the list of things Bernie has proposed, because its the same sort of ideas Ive been promoting on this very site for YEARS!
To be honest, Im not the worlds biggest fan of everything that Bernie Sanders has to say, but I find his new Student Loan Cancellation Plan and his old Free College Plan to be so compelling that I cant help but support it, and him.
Now, before we leave, lets review each of the 6 tenets from his Free College Plan in detail, because going through these will help you get a better understanding of how things may turn out if Bernie does, in fact, get elected.
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Bernies Plan Does Nothing To Fix The Actual Problem
The term expensive is relative. The problem isnt that college is too expensive, because according to every metric and calculation, college is still worth attending from a financial standpoint. The real problem is that even though college is still worth it, the cost to attend has risen to the point where some people who want to go, and are qualified to go, cant afford to go thats the problem. The cost of tuition, room & board and fees at a 4-year institution rose nearly 130% between 1982 and 2013 after adjusting for inflation. But why?
Between 1998 and 2008, Americas private colleges increased spending on instruction by 22 percent while increasing spending on administration and staff support by 36 percent-Washington Monthly, The Administrators Ate My Tuition
The most obvious culprit is out of control spending. These universities are competing for a fresh wave of incoming students every year, and in order to attract those students, schools choose to spend more and more on non-academic items such as recreation centers and new buildings that have costly overhead. The only way to cover all this new overhead is to raise tuition. And schools have no problem raising tuition because they know there is an abundance of money available to students in the forms of grants, scholarships and loans. The schools know they will get paid regardless of how high tuition is and regardless of how crushing that debt is to their newly-minted graduates.