A student loan proposal Democrats should support
Many people who have gone to college have taken out loans to help them pay for these educational services. This program has benefited multi-billion-dollar institutions like Harvard and Yale, as well as those administrators getting paid million-dollar-per-year salaries. To top it all off, these massive institutions get tax-exempt status and billions of dollars of grants.
We need to get this process under control. Some changes to federal tax law, student loan rules, and the federal grant-giving process will do the trick.
- All university endowments over $1 billion in size should pay their fair share in taxes to pay off student loans. A 25 percent–per-year tax on these tax-subsidized behemoths can go towards helping deal with the student loan crisis.
- Any student attending a college with an endowment of greater than $1 billion is ineligible for student loans or federal student grants or scholarships. The combination of these two items will force the relevant universities to use their endowments to help students out rather than hoarding the money.
- Any student subject to tuition and fees greater than $20,000 per year for the university he is attending shall not be eligible for the federal student loan program. Potential students will have to find institutions that charge more reasonable prices for educational services. This will put extreme pressure on colleges and universities to lower their tuition.
- Any university with an endowment of greater than $1 billion shall not be eligible for federal research grants. These rich universities should not be receiving federal government handouts.
- Any university or college administrator making more than $1 million per year shall pay a marginal tax rate of 90% on all earnings over $1 million.
Combined, these changes will reduce tuition and levels of student debt throughout the country. It will also impose taxes on those who take advantage of the tax-exempt status of universities and colleges to the detriment of students and society at large.
I call on Bernie Sanders to support this plan. While this won't make college free, it will get billionaires and millionaires to pay their fair share.