[W]ASHINGTON — U.S. Sen. Bernie Sanders, I-Vt., introduced legislation Monday to make tuition free at public colleges and universities and to reduce student debt for students and public educational institutions.
“Higher education in America should be a right for all, not a privilege for the few,” Sanders said. “If we are to succeed in a highly competitive global economy and have the best-educated workforce in the world, public colleges and universities must become tuition-free for working families and we must substantially reduce student debt.”
The legislation reflects a longstanding policy goal for Vermont’s junior senator. Tuition-free college was a key plank of his presidential bid. Last July, near the end of the primary season, Hillary Clinton unveiled a similar college proposal aimed at wooing Sanders and his charged-up supporters. Sanders’ college proposal also caught the eye of New York Gov. Andrew Cuomo, who pitched free community and public college for New York residents in January with Sanders at his side.
The College For All Act, which was also introduced in the House by first-term progressive Rep. Pramila Jayapal, D-Wash., is a more moderate proposal than Sanders’ campaign promise of free tuition for all. Much like the Clinton campaign plan, the act would eliminate tuition and fees at four-year public colleges and universities for families making up to $125,000 — a cap that would cover 83 percent of American households. Community college, meanwhile, would be free for all.
To pay for the plan — estimated to cost $600 billion over 10 years — Sanders introduced a companion bill entitled The Inclusive Prosperity Act. The legislation, which mirrors past proposals from U.S. Rep. Keith Ellison, D-Minn., would add a small tax on every stock, bond or derivative sold on Wall Street.
The United States instituted a .02 percent tax on stock transactions from 1914 until 1966. The tax funded job and financial recovery programs during the Great Depression, according to the Center for Economic and Policy Research. At least 29 countries have such a tax, including the United Kingdom, where all trades on the London Stock Exchange are taxed.
Sanders’ bill proposes a 0.5 percent tax on stock trades, which is identical to the U.K. rate. He would also institute a 0.1 percent fee on bonds and a 0.005 percent fee on derivatives.
The federal tax structure would fund 67 percent of the program, with states contributing 33 percent in matching funds. The money would be mandated for specific educational costs and would be prohibited from being directed to administrative salaries or the construction of non-academic buildings.
The Sanders plan also aims to slash student debt by reviving a policy that expired in 2006. The plan would lower student loan interest rates for new undergraduate borrowers from 3.76 percent to 1.88 percent. It caps student interest rates at 5 percent for undergraduates and 8.25 percent for graduate students. Existing borrowers would be able to refinance their loans to take advantage of the lower rates.
The legislation also expands the Pell Grant program, giving students the ability to use aid money for various college-related costs, including housing and transportation. It also triples the current funding levels for the federal work-study program in an effort to offer the program to an additional 1.4 million students.
Sanders would also double funding for the TRIO Programs for disadvantaged students while enriching the GEAR UP Program, which offers college counseling and assistance to students overwhelmed by the complex application process. Sanders’ office said the funding increase would expand access to college for more than 1.5 million students. (In his budget proposal, President Donald Trump targeted both these programs for cuts.)
In his public push for the plan, Sanders often points out that colleges and universities are already tuition-free throughout much of Europe, and polling suggests a majority of Americans want free college.
But Vermont’s junior senator faces a challenge in moving the plan in a Republican-controlled Congress. Sanders’ plan has attracted five Democratic co-sponsors in the Senate, though they represent the more liberal members in the chamber.
Meanwhile, in New York, state legislators of both parties panned the Sanders-approved college tuition plan offered by Cuomo. While substantially different from Sanders’ tuition plan, lawmakers called the Cuomo plan a “sham,” contending that it would not offer as many struggling students as promised.