America: Land of the Free Home of the Educated

The 2016 Presidelibrary-488677_640ntial Elections are right around the corner and the candidates are putting on a show for the entire nation. Candidate Bernie Sanders has shaken the nation by proposing to give free public college education for all if elected. This comes at a time where student debt is at all-time highs and morale for college graduates is at a low. Can we really afford to give out a free college education to all?

First we must analyze Bernie Sanders’ plan to implement such a system since he is the biggest advocate of such an idea at this time. According to Sanders his big plan for accumulating the funding for such an overhaul is through a tax on Wall Street called a Robin Hood Tax. The Robin Hood Tax is essentially taking money from the rich (taxing transactions on Wall Street) and reallocating that money to the less fortunate through government programs. More specifically this will be done by taxing less than a percent on financial sector transactions. This is a Financial Speculation (or transaction) Tax (FST/FTT) which is essentially a sales tax on transactions for stocks, bonds, foreign currency exchange etc. It has been claimed to not affect ordinary investors like the majority of citizens who have retirement savings tied up in the stock market. It would be designed to protect the average person and extra measures can be taken to prevent the costs from being passed down to us. This is a tool that we can use to finally get rid of the national plague of debt from loans.

Loans for profit are why so many are stuck with such high debt today and the federal government needs to be stopped from doing so. Sanders plans on using these profits to lower the interest rates on loans and wants students to be able to use work study and financial aid to help eliminate costs. Advocates for this free education plan will state that European countries such as Germany, Britain, and France etc. have or will implement such a plan and that it is doable. After a closer look at the European nations, they do provide free college however underlying that free tuition is a much higher income tax that helps fund this. The money needs to come from somewhere and in these nations, everyone contributes to pay for colleges in the form of a tax. Sanders has also pointed out that the California college system at one time had free education and that it worked out well before the government shifted its focus. The California college system was indeed free until the 1960s sustained mostly through property taxes. Much has changed since then though. The government no longer focuses on sustaining those colleges and tuition now covers most of the costs. Sanders could certainly return to the old system with his new tax system and the nation like California could have a free college education.

After learning about Sanders plan, the biggest concern raised about this issue is where is the money coming from? Someone is going to have to pay for this massive plan and people are scared that the burden is going to fall heavily on the taxpayers. The Robin Hood Tax is taxing the financial sector but still could affect retirement plans if it devalues the stock market by double digit percentage points. Stephen Steinberg from the Huffington Post points out that Sanders’ plan is short sighted and is not a good idea because this does not target the root of the problem. This would only be another bandage on the national education problem. The free education plan is too broad and it would not only cover those middle and lower class people but would also pay for those in the 1%. The fraction of 1% tax that is proposed may be too high and cause more ripple effects on the stock market than anticipated. The members of the government change too often and within the next 4 years there may be a new President that alters these policies. It will be difficult for this plan to remain intact for the long run however we do need a starting point. It would be better to start this movement now rather than having our loved ones add more to their debt each year.

Everyone has a relative or friend that has outstanding loans after graduating from college and knows the tough situation that they are in. As of 2016, the average graduate has rose to $37,172 in debt. In one case, Julia Handel from New York was stuck with $75,000 in loans and is still stuck with a huge chunk of it despite already beginning her career. It is estimated that despite having a solid job making $40,000 a year, it would take Julia 15 years to fully pay this off. In the mean time she has to do whatever it takes to save extra cash on the side whether it be putting off haircuts and doctor appointments and cutting of the smaller costs that will add up in the end. This is the life that many people that we know if not ourselves have to live with for the near future until our debts are cleared.

This is an issue that is more complex than it seems. It is difficult to predict exactly how much it will affect the economy and we cannot place a specific amount on how it will directly and indirectly cost the citizens of the nation. Such a big idea is likely to have some unforeseen consequences and we cannot even be sure if it will solve the problem in the long term. More numbers will need to be crunched to project such repercussions of a plan. Sanders’ idea seems optimistic and may work out well for now. Is it the right way of approaching a free higher education? This may be a problem. The government may need to implement some heavy restrictions on public colleges spending’s before trying to reduce tuition costs since that is the main problem. A free college education should certainly be possible but may have to be done using a smaller Robin Hood Tax and reallocating some of the funds from another sector of the government. This brings up the problem of where to take it from. The defense budget? Medical budget? It’s a tough decision. A free college education is not a right but a privilege. It should be our right not to have to be stuck with such a high debt in order to pay arguably more than a degree may be worth. This is an issue that will need to be debated more in the future primaries in order to solve the growing college debt bubble.

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