In May 2015, Senator Bernie Sanders, of Vermont, proposed a new bill eliminating undergrad tuition at four-year colleges and universities. Sen. Sanders has named the bill The College For All Act.
This bill will also help lower interest rates on currently held federal student loans, allowing graduates to refinance their existing loans at new lower rates. The bill includes to stop the government from making profit on student loans. Sanders’ intent with the new loan rates is to fix the U.S.’s $1.20 trillion student debt problem.
Sen. Sanders plan is to produce the bulk of the needed funds for this bill “by a small tax on financial transactions such as stocks and bonds,” a Wall Street speculation tax. Sanders proposes “instituting a 0.5% tax on trades of stocks and a 0.1% tax on bonds and an even smaller fee on so-called derivatives, such as stock options and futures contracts. This will generate up to $300 billion a year,” reported by CNN Money.
The new act will lower student loan interest rates to the formula, which was in effect until 2006. Interest rates will almost be cut in half for undergraduates, dropping from 4.32 percent to a more reasonable 2.32 percent. The legislation guarantees that the rates would never rise above 8.25 percent.
“At a time of massive income and wealth inequality, at a time when trillions of dollars in wealth have left the pockets of the middle class and have gone to the top one-tenth of one percent, at a time when the wealthiest people in this country have made huge amounts of money from risky derivative transactions and the soaring value of the stock market, this legislation would impose a Wall Street speculation fee on Wall Street investment houses and hedge funds,” Sanders said.
This Wall Street speculation tax will have the government cover roughly two-thirds of the total cost while the states will pick up the balance. “It is a national disgrace that hundreds of thousands of Americans today do not go to college, not because they are unqualified, but because they cannot afford it. This is absolutely counter-productive to our efforts to create a strong competitive economy and a vibrant middle class. This disgrace has got to end,” Sanders said in a statement.
The College For All Act will have some requirements that will need to be met for each state. According to Sen. Sanders’ website, “States will need to maintain spending on their higher education systems, on academic instruction, and on need-based financial aid.” Also, colleges must reduce dependence on low-paid adjunct professors. Included in this bill, there can be no funding used for administration salaries, merit-based financial aid, or construction of non-academic buildings, such as stadiums and student centers.
Sen. Sanders does recognize that congressional Republicans would never support the taxes designed to fund this bill but Sanders knows “the American people will go along with it.” Sanders’ new bill will hopefully bring the United States up to a new level, educationally and economically with the rest of the world.
For more information on Bernie Sanders and his proposed College For All Act, visit his congressional website at http://www.sanders.senate.gov