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Gibson writes: "American college students are enslaved by $1.2 trillion in student debt, making the American Dream nearly impossible for today's college grads. But that can be easily fixed."

Keegan O'Brien, of Boston, front, joins with members of the Occupy Boston movement, students from area colleges, and union workers as they display placards and shout slogans during a march through downtown Boston in 2011. (photo: AP/Steven Senne)
Keegan O'Brien, of Boston, front, joins with members of the Occupy Boston movement, students from area colleges, and union workers as they display placards and shout slogans during a march through downtown Boston in 2011. (photo: AP/Steven Senne)

6 Easy Ways to Make College Free for All Americans

By Carl Gibson, Reader Supported News

23 November 14


he cost of a college education in the U.S. has risen by 500 percent in the last three decades, and that cost is showing no sign of slowing down. A vast majority of Americans – 80 percent – want Congress to make college education more accessible, according to an NBC/Wall Street Journal poll conducted from November 14-17. But Americans can actually take classes for free, in English, in seven countries -- Germany, Finland, France, Sweden, Norway, Slovenia, and Brazil. Meanwhile, American college students are enslaved by $1.2 trillion in student debt, making the American Dream nearly impossible for today’s college grads. But that can be easily fixed.

A free college education for would actually cost $112 billion less than the government currently spends on Pell Grants ($35 billion), federal work study programs ($930 million), tax breaks ($32 billion), and federal student loans ($107 billion). Public universities collected just $63 billion in undergraduate tuition in 2012. Here are just a few simple ways the government could find that $63 billion to make a public higher education free for anyone who wants it.

1. A New Executive Order Abolishing All Current and Future Student Debt

The first order of business would have to be a new executive order to address the American student debt crisis. The only limitations on federal executive orders are that they have to clarify an existing federal law rather than make a new one. The only two executive orders that were overturned on that basis were Teddy Roosevelt’s executive order nationalizing steel mills and Bill Clinton’s executive order that forbade the government from contracting with companies that had strikebreakers on the payroll. If President Obama were to issue an executive order abolishing all current and future student debt, he could cite Article 1, Section 8 of the U.S. Constitution, which gives Congress the power to "pay the debts" and "provide for ... the general welfare" of the American public. While executive orders are never mentioned in the Constitution, President Obama’s legal team could easily make the argument that abolishing student loans could be classified as “paying the debts” and “providing for ... the general welfare” of indebted college graduates and future students.

As of December of 2013, the average American owed $29,000 in student debt. The Brookings Institution found that the average monthly student loan payment today is approximately $242. This means it will take roughly 120 months, or ten years, for the average American student to pay off their student loans, and that’s assuming a graduate is lucky enough to find a job right after graduation and not have to default on payments.

Combine this crippling cycle of student debt, followed by a decade of indentured servitude, with the nature of federal student loans. Today, the interest rate on federal student loans is 4.66 percent. Compare that to the 0.25 percent preferential interest rate the Federal Reserve gives the big banks. One of those interest rates is for students trying to get a college education and contribute to the economy. The other interest rate is for big banks that regularly engage in rigging student loan interest rates, fraudulently foreclosing on homeowners, and generally making a mess of the economy. Also, keep in mind that the federal government will be making a $127 billion profit from student loans over the next decade, as the interest rates on those loans exceed the costs necessary to administer the loan program. An executive order to abolish student debt is not only needed, but justified.

2. Trim the Pentagon Budget by $63 Billion

$63 billion is nothing for the Department of Defense – just 12 percent of the Pentagon’s $526 billion budget for 2014. The Pentagon has a bevy of weapons programs that serve no purpose and could be easily eliminated. The Littoral Combat Ship, which costs $30 billion per year to maintain, includes a fleet of 55 ships. The ships are nowhere near combat-ready, plagued by problems as fundamental as structural cracks, burst pipes, propulsion problems, computer system failures, malfunctioning power generators, and basic communication errors. Taxpayers could easily do without this costly burden.

The Navy’s new Gerald Ford-class aircraft carrier cost roughly $15 billion to make, yet the Government Accountability Office found multiple problems with the carrier’s untested technology, key engineering obstacles, and a $1 billion cost overrun. And as this report pointed out, aircraft carriers are an obsolete element of warfare. Long-range, heavy-yield missiles could easily destroy any carrier used in actual combat. After cutting out this new carrier and the Littoral Combat Ship, we’ve already saved $45 billion.

The other $20 billion in annual cost savings can easily be taken from the nuclear weapons program. A study from the Center for Nonproliferation Studies found that maintaining the nuclear weapons program costs taxpayers anywhere from $18 billion to $25 billion per year, and that’s just the nonessential, discretionary expenses. The actual nuclear defense program costs taxpayers roughly $179 billion each year when accounting for nuclear submarines, land-based launchers, and all of the staff to maintain nuclear weapons stockpiles. But even the Pentagon itself has said it doesn’t know how much money is spent on maintaining its nuclear weapons program.

But given what we did to Japan at the end of World War II, it’s been widely agreed across the world that nuclear weapons should never again be used, because of the catastrophic effects that would result from global nuclear warfare. It would be much more cost-effective, in terms of taxpayer dollars, human lives, and preservation of a somewhat stable climate, to pursue full nuclear disarmament. Most Americans would probably agree that free college should come before thousands of missiles capable of destroying all human life.

3. Tax Corporate Offshore Holdings and Close Offshore Tax Loopholes

Corporations currently keep $2.1 trillion overseas in tax-free accounts. Keep in mind, these are profits made in the United States that our lax tax code allows to be booked overseas despite those corporations having essentially no employees or economic activity in those tax havens. This money isn’t being used to create jobs or invest in new technologies or new factories – it’s just sitting there. Forcing corporations to bring this money back to the United States at the standard 35 percent tax rate would immediately provide $735 billion in tax revenue, which could single-handedly fund free public college education for undergrads for 11 years. By simply closing just one tax loophole that allows multinational corporations to indefinitely “defer” paying taxes on their U.S. profits, we could raise another $60 billion each year. Why aren’t we already doing this?

4. Tax Capital Gains Like Actual Work, and Make Millionaires Pay an Average Worker’s Tax Rate

If you go to work for 8 hours a day for 52 weeks to bring home a modest salary of $30,000 or $40,000 a year, like most ordinary Americans do, you’re expected to pay an income tax rate right around 30 percent or so. But when wealthy investors who contribute nothing to the economy make millions just by trading imaginary numbers around in space, they only pay a 15 percent tax on their “earnings.” If we made people who make money just from having money pay the same tax rate as people who actually contribute to society, we could bring in an additional $61.3 billion in revenue each year. We could also easily implement the “Buffett Rule,” which would make all millionaires pay a minimum 30 percent income tax rate and bring in another $7 billion a year. These two measures alone would cover the cost of free public college tuition for all undergrads, and would only affect the richest one percent of the population.

5. Tax the 0.3 Percent’s Unearned Inheritances

Currently, the estate tax only applies to 0.3 percent of all inheritances. Even in the year 2000 when the estate tax was much less lenient, less than 2 percent of all estates paid any taxes at all. The Bush Tax Cuts changed the estate tax from 55 percent to 35 percent, and only applied to inheritances of $3.5 million for an individual. In 2010, Congress exempted all inheritances of $5 million and less from the estate tax. Rolling back the estate tax to Clinton-era levels could provide an additional $50 billion a year. That measure combined with any of the other solutions listed above would easily cover the cost of free college. Which would you rather have – free public college for all Americans who need it, or even more money for the wealthiest 0.3 percent?

6. Make Wall Street Pay a 1 Percent Sales Tax on All Transactions

Depending on what state you live in, buying a gallon of milk at the grocery store, gas for your car, new shoes for your kids, or a meal at a restaurant will come with a sales tax of 1 percent or greater (unless you live in Alaska, Delaware, Montana, New Hampshire, or Oregon). But if you make your money on Wall Street, none of your transactions come with any sales tax at all. Even just a 1 percent sales tax on all financial transactions would generate an additional $350 billion in revenue each year, more than five times the amount needed to provide a free college education at a public university for all Americans. Also, this sales tax would have the added benefit of discouraging speculative trading, and encouraging more long-term investment, making the economy much less volatile.

Asking American college students of limited means to face a decade or more of debt just to have the education necessary to be competitive in today's job market while the wealthiest 0.1 percent and billion-dollar multinational corporations get so many handouts from the government is obscene. It's past time to make a public college education free for all Americans.

Carl Gibson, 27, is co-founder of US Uncut, a nonviolent grassroots movement that mobilized thousands to protest corporate tax dodging and budget cuts in the months leading up to Occupy Wall Street. Carl and other US Uncut activists are featured in the documentary We're Not Broke, which premiered at the 2012 Sundance Film Festival. Carl is also the author of How to Oust a Congressman, an instructional manual on getting rid of corrupt members of Congress and state legislatures based on his experience in the 2012 elections in New Hampshire. He lives in Sacramento, California.

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News. your social media marketing partner
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