Reprinted from Reader Supported News
The cost of a college education in the U.S. has risen by 500 percent in the last three decades, and that cost is showing no sign of slowing down. A vast majority of Americans -- 80 percent -- want Congress to make college education more accessible, according to an NBC/Wall Street Journal poll conducted from November 14-17. But Americans can actually take classes for free, in English, in seven countries -- Germany, Finland, France, Sweden, Norway, Slovenia, and Brazil. Meanwhile, American college students are enslaved by $1.2 trillion in student debt, making the American Dream nearly impossible for today's college grads. But that can be easily fixed.
A free college education would actually cost $112 billion less than the government currently spends on Pell Grants ($35 billion), federal work study programs ($930 million), tax breaks ($32 billion), and federal student loans ($107 billion). Public universities collected just $63 billion in undergraduate tuition in 2012. Here are just a few simple ways the government could find that $63 billion to make a public higher education free for anyone who wants it.
1. A New Executive Order Abolishing All Current and Future Student Debt
The first order of business would have to be a new executive order to address the American student debt crisis. The only limitations on federal executive orders are that they have to clarify an existing federal law rather than make a new one. The only two executive orders that were overturned on that basis were Teddy Roosevelt's executive order nationalizing steel mills and Bill Clinton's executive order that forbade the government from contracting with companies that had strike-breakers on the payroll.
If President Obama were to issue an executive order abolishing all current and future student debt, he could cite Article 1, Section 8 of the U.S. Constitution, which gives Congress the power to "pay the debts" and "provide for ... the general welfare" of the American public. While executive orders are never mentioned in the Constitution, President Obama's legal team could easily make the argument that abolishing student loans could be classified as "paying the debts" and "providing for ... the general welfare" of indebted college graduates and future students.
As of December of 2013, the average American owed $29,000 in student debt. The Brookings Institution found that the average monthly student loan payment today is approximately $242. This means it will take roughly 120 months, or 10 years, for the average American students to pay off their student loans, and that's assuming a graduate is lucky enough to find a job right after graduation and not have to default on payments.
Combine this crippling cycle of student debt, followed by a decade of indentured servitude, with the nature of federal student loans. Today, the interest rate on federal student loans is 4.66 percent. Compare that to the 0.25 percent preferential interest rate the Federal Reserve gives the big banks. One of those interest rates is for students trying to get a college education and contribute to the economy. The other interest rate is for big banks that regularly engage in rigging student loan interest rates, fraudulently foreclosing on homeowners, and generally making a mess of the economy. Also, keep in mind that the federal government will be making a $127 billion profit from student loans over the next decade, as the interest rates on those loans exceed the costs necessary to administer the loan program. An executive order to abolish student debt is not only needed, but justified.
2. Trim the Pentagon Budget by $63 Billion
$63 billion is nothing for the Department of Defense -- just 12 percent of the Pentagon's $526 billion budget for 2014. The Pentagon has a bevy of weapons programs that serve no purpose and could be easily eliminated. The Littoral Combat Ship, which costs $30 billion per year to maintain, includes a fleet of 55 ships. The ships are nowhere near combat-ready, plagued by problems as fundamental as structural cracks, burst pipes, propulsion problems, computer system failures, malfunctioning power generators, and basic communication errors. Taxpayers could easily do without this costly burden.
The Navy's new Gerald Ford-class aircraft carrier cost roughly $15 billion to make, yet the Government Accountability Office found multiple problems with the carrier's untested technology, key engineering obstacles, and a $1 billion cost overrun. And as this mic.com report pointed out, aircraft carriers are an obsolete element of warfare. Long-range, heavy-yield missiles could easily destroy any carrier used in actual combat. After cutting out this new carrier and the Littoral Combat Ship, we've already saved $45 billion.
The other $20 billion in annual cost savings can easily be taken from the nuclear weapons program. A study from the Center for Nonproliferation Studies found that maintaining the nuclear weapons program costs taxpayers anywhere from $18 billion to $25 billion per year, and that's just the nonessential, discretionary expenses. The actual nuclear defense program costs taxpayers roughly $179 billion each year when accounting for nuclear submarines, land-based launchers, and all of the staff to maintain nuclear weapons stockpiles. But even the Pentagon itself has said it doesn't know how much money is spent on maintaining its nuclear weapons program.
But given what we did to Japan at the end of World War II, it's been widely agreed across the world that nuclear weapons should never again be used, because of the catastrophic effects that would result from global nuclear warfare. It would be much more cost-effective, in terms of taxpayer dollars, human lives, and preservation of a somewhat stable climate, to pursue full nuclear disarmament. Most Americans would probably agree that free college should come before thousands of missiles capable of destroying all human life.
3. Tax Corporate Offshore Holdings and Close Offshore Tax Loopholes
Corporations currently keep $2.1 trillion overseas in tax-free accounts. Keep in mind, these are profits made in the United States that our lax tax code allows to be booked overseas despite those corporations having essentially no employees or economic activity in those tax havens. This money isn't being used to create jobs or invest in new technologies or new factories -- it's just sitting there. Forcing corporations to bring this money back to the United States at the standard 35 percent tax rate would immediately provide $735 billion in tax revenue, which could single-handedly fund free public college education for undergrads for 11 years. By simply closing just one tax loophole that allows multinational corporations to indefinitely "defer" paying taxes on their U.S. profits, we could raise another $60 billion each year. Why aren't we already doing this?
4. Tax Capital Gains Like Actual Work, and Make Millionaires Pay an Average Worker's Tax Rate