A Proposal for Affordable College for All

I first floated this idea to friends and strangers a few years ago, and I actually heard echoes of the same idea from a talking head on Fox news about a year and a half ago, but no fire has lit up the political discussion, and I fear that it is because it is neither “liberal” nor “conservative” but a (gasp) compromise somewhere in the middle.  I have only mused on this plan, so in an effort to flesh it out and mentally check my math and open up discussion for flaws that need to be worked on, I decided to put it in essay form.

The most important aspects of this plan are that it is voluntary on all sides, places responsibility on both the college and the student, and is largely self-funding.  It will require an initial investment, but I believe that if administered with any competence at all, that investment will be paid back with interest.

The basics are as follows: Colleges that wish to participate must meet criteria. In addition to being accredited and follow other federal funding guidelines, they must limit  increases in the Total Cost of Attendance (COA) to the Consumer Price Index(CPI). That is, tuition, fees, books, room and board for the average student must be held to a reasonable increase as a whole. The measure will be over a five year average, so that if economic pressures keep the costs low for a few years, then jump back up, the college can make up the difference to a degree. Those colleges that keep these terms can participate.  For the Student’s part, students apply for the program and are allotted funds made payable to the College on the condition that for the rest of their life, there will be an increase in the rate of their income tax. Each semester, for example, they may accrue a 1% obligation on their tax rate. A student using this program for an Associate’s degree would expect a 4% tax burden, while a Bachelor’s would be a 8-10% burden. The program could include graduate studies if the funding model is successful.

There are logistics to work out to make this work, but the voluntary nature makes it flexible and I believe that a large percentage of colleges would opt in once the bookkeeping changes are understood. Colleges that have very high rates but give virtually every student aid would be able to re-direct the money into containing cost increases, or devising a co-pay system for students that still have a gap or students opting out of the obligation. Scholarships would still be a useful tool for enticing students with particular talents to a given school, but it would no longer be the only option for diversifying the student body.

For the student’s part, the funding would be limited, but the caps would be tied to the CPI. It would probably need to be a standard amount high enough to cover in-state COA at most public universities and COA at most tier 2 private universities. Because the funds are paid directly to the college, the COA for the general populace will be the limit disbursed, and the colleges will be forbidden to consider the student’s opting in or out of the program in granting financial aid. Students may opt in or out each semester after financial aid is determined, so that a full scholarship requires no increased obligation for that term. With the same money, more scholarships for all-but-opt-in-funds could be offered to a larger range of students.

So, to bring this into perspective, Harvard would still not be free, but someone who was accepted to Harvard would not have to be smothered in debt to accept the position. Students who choose not to attend college because the lack a co-signer with a decent credit score makes it unaffordable, which is one of the biggest challenges colleges face in diversifying their student body, would have an option for at least getting the “some college” required for much employment.  “B” students would no longer be excluded from getting that sort of shot at success, and the new population of potential students will change recruiting patterns significantly.

Now, for some sample math:

According to the College Board, a college graduate will make approximately 60% more money than someone with only a high school diploma. This is a great deal for only 8-10%

According to This Site, The National Association of Colleges and Employers has determined that the average starting salary for College Graduates in 2016 will have an average salary over $50,000. We all want to say “not me” or “not my kid”, but this includes Engineers making $75,000 along with Art History majors making much less, so it is a good number for dealing with the population at large.

Of those who opt in, a rough table might look like the following, with an assumption of an average annual raise of 2.5% and an Adjusted Gross Income of about 70% of total salary.

Year Ave Salary AGI 8% 10% Total paid in 8% Total paid in 10%
1 50000 30000 2400 3000 2400 3000
2 51250 35875 2870 3588 5270 6588
3 52531 36772 2942 3677 8212 10265
4 53845 37691 3015 3769 11227 14034
5 55191 38633 3091 3863 14318 17897
6 56570 39599 3168 3960 17486 21857
7 57985 40589 3247 4059 20733 25916
8 59434 41604 3328 4160 24061 30076
9 60920 42644 3412 4264 27473 34341
10 62443 43710 3497 4371 30969 38712
11 64004 44803 3584 4480 34554 43192
12 65604 45923 3674 4592 38228 47784
13 67244 47071 3766 4707 41993 52492
14 68926 48248 3860 4825 45853 57316
15 70649 49454 3956 4945 49809 62262
16 72415 50690 4055 5069 53865 67331
17 74225 51958 4157 5196 58021 72527
18 76081 53257 4261 5326 62282 77852
19 77983 54588 4367 5459 66649 83311
20 79933 55953 4476 5595 71125 88906
21 81931 57352 4588 5735 75713 94641
22 83979 58785 4703 5879 80416 100520
23 86079 60255 4820 6025 85236 106545
24 88231 61761 4941 6176 90177 112722
25 90436 63305 5064 6331 95242 119052
26 92697 64888 5191 6489 100433 125541
27 95015 66510 5321 6651 105754 132192
28 97390 68173 5454 6817 111207 139009
29 99825 69877 5590 6988 116798 145997
20 102320 71624 5730 7162 122528 153159

If the average student gets $20,000 per year in benefits from the program, it will be returned to the coffers in roughly twenty years. This would mean that for the first years the program would require an investment, but each year the percentage of the program covered by the additional taxes would increase. Most people who graduate at age 24 and work to age 64 would, in their higher earning years, more than replenish the fund even with cost increases allowed to the colleges, allowing the initial investment to be recovered and reinvested.

Now, as I stated, this is a very rough calculation, and the investment required if 5 million students opt in at $20,000 in the first year would be $80 Billion.  Which is about half of what we spend on the USDA. The annual cost of college would continue to rise, and as the percentage of the workforce attained degrees, the premium on a degree could fall, but the economic benefits of having a populace paying taxes on these higher incomes would still outpace the overall cost. Other nuances include that this table does not take into account those who drop out after 3 years, or how those who stop with 2 year degrees fit into the equation, and none of us can be certain what the future holds economically. But I believe that a better educated populace can only improve our future, and can only raise the discourse of our politics.

I would love to see a better mathematical treatment of this idea. I truly want to know if someone can show this idea to have more or less merit than presented.  I am not worried about Lefties or Righties spouting biased opinions about Truth, Justice and the American Way, but instead I would like to see this kind of idea get serious consideration. No, I don’t expect that whatever bureau might be charged with implementing this idea would be 100% efficient or free of any corruption, but I do believe that on balance it is a good thing that we have highways and a space program and other things that are also handled by the government, and this would be, on balance, a worthwhile kind of thing for We The People to do.


About UncleJoe

I'm a middle aged male who has attended a seminary as well as receiving a degree in philosophy from a secular university neither of which would particularly impress you if I said which. I have pondered and puzzled questions of faith and the lack thereof for many years. I don't not claim to be holy, or an expert on everything, simply observant and interested. I'll make bold statements about what I see as the way things are, and you don't have to take my word for it. Call me on it. I am here for the discussion.
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