Paying for College
The U.S. government subsidizes college students in three basic ways: (1) through Pell grants that are available to low-income students, (2) through subsidized federal student loans, and (3) through tax deductions or credits for parents. The student loans are to be paid back to the government. The Pell grants and tax benefits are not. Student loan repayments impose pressures on graduates and non-graduates alike. The student loan default rate is expected to be about 18%. The pressures that puts on former students are, in a great many, probably millions, of cases bad for their career paths and their families.
The Education Solution proposes to replace these programs with a stipend of up to $10,000 per year for students that elect to accept it. The stipend would replace federal student loans, Pell grants and tax benefits. It would be repayable by the student, but only as a percentage of income—an additional income tax of 2.5% of income for participating students/former students beginning six years after college enrollment. No interest would be payable, but 1.5% of income would be paid for ten years after the stipend had been repaid. The risk of a student not succeeding thus would be spread over society as a whole. But a student’s success would benefit everyone.
The stipend program is a partnership between the student and her government.
For more information about the stipend program and why it is needed, please click on the link and buy the book.
To share your thoughts on the stipend program, please go to join-the-conversation.org, where we would like to hear from you.