The central argument I have been making is that our current system does not work: in the last three decades, we have spent trillions ofdollars on financial aid and higher tax breaks, and the result is that students coming from families in the top income quartile have a 77% chance of attaining acollege degree, and students from the bottom 25% have a 9% rate. Moreover, not only have students been forced to take out over $1.3 trillion dollars of debt, but as more students go to college, the US has moved from 1st to 12th in college attainment.
Just as many of our K-12 schools have become self-segregated by class and race, our institutions of higher education have also becomeseparate and unequal. Low-income Black and Brown students tend to go to low-funded community colleges with low graduation rates, while wealthier students attend wealthy universities with high graduation rates. In fact, the celebrated California Master Plan was founded on a principle of hierarchy and has resulted in a system of de facto segregation.
In order to make higher education an engine of social mobility and not a generator of economic inequality, we have to rethink how we fund these institutions. Instead of using an ad hoc voucher system that provides aid to individual students, the federal government needs to send funds directly to institutions with a strict set of requirements, including a maintenance of state funding, a cap on tuition and room and board increases, and a financial aid system that makes the total cost of attendance free for low- and moderate-income students.
What needs to be realized first is that no single state or institution can fix this problem on its own. There has to be a joint federal-state-institution compact because we have aid coming from all of these different sources. Bernie Sanders believes that we should fund this type of program through a new financial transaction tax, but as I argued on a recent radio show and on a Fox News debate, a more effective strategy would be to use money currently going to tax breaks and tax exemptions to make higher education free and accessible.
In the current system, wealthy individuals and wealthyinstitutions are being subsidized through taxation policies catering to thesuper-rich. Not only do private universities with tax-exempt, multi-billion dollar endowments allow wealthy individuals to escape taxation through charitable giving, but these institutions run tax-exempt enterprises without paying local property taxes. Meanwhile, wealthy individuals have turned to 529 College Savings plans as a new tax shelter.
All of the tax breaks dedicated to high-income individuals and institutions help to decrease state and federal tax revenue, and this reduction of funds creates an environment where politicians can say they have no money for public higher education. What citizens have to fight for is integrated, debt-free public higher education, and this can be done by taking on the higher ed tax subsidies for the wealthy.
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