College for All, but Who is Paying?

by Joseph Betz

The rising cost of college is no myth, including compensation for inflation, the cost of tuition and fees at a public university is now 4 times what it was 40 years ago. While government aid covers some of this burden, students still must resort to taking massive student loans to cover the cost of a higher education. But can the government afford to do more?

11.1 million students attended public colleges and universities in 2014, taking into account undergraduates and graduate students. States spent $73 billion funding higher education in 2014 leaving students with $64.3 billion in tuition, which comes out to $5,793 per student on average. In 2000, states spent $51.9 billion which left the 8.6 million students with $21.5 billion in tuition, coming out to an average cost of $2,500 per student.

Bernie Sanders has proposed his “College for All” plan that would aim at paying for this $73 billion tuition bill by increasing federal funding by $47 billion and state funding another $23 billion. The federal government would pay $2 for every $1 that state governments spend on tuition at public universities. In addition to drastic tuition aid, the plan calls for cutting student interest rates to about 2% for undergraduates. The cost of this plan could potentially be up to $750 billion over the course of 10 years.

Sanders plans to fund the program by imposing a 0.5% fee on stock trades, a 0.1% fee on bonds, and a 0.005% fee on derivatives. Warren Gunnels claims that this would raise up to $300 billion a year, citing a University of Massachusetts report, whereas Steve Rosenthal, a Tax Policy Center senior fellow, reported that it would only raise about $51 billion.

The expanded access to low cost higher education would be revolutionary, with far reaching societal and economic ramifications.

http://trends.collegeboard.org/college-pricing/figures-tables/tuition-and-fees-and-room-and-board-over-time-1975-76-2015-16-selected-years

http://money.cnn.com/2015/10/16/news/economy/sanders-taxes-spending/

http://www.brookings.edu/~/media/research/files/papers/2015/09/28-taxes-inequality/would-top-income-tax-alter-income-inequality.pdf

http://www.cnn.com/2016/02/03/politics/bernie-sanders-free-college-costs/

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