On Tuesday, Sen. Bernie Sanders (I-VT) introduced The College for All Act, legislation that would eliminate undergraduate tuition at public colleges and expand work-study programs to help students at private universities. The bill also calls for a reduction in interest rates on federal student loans to stop the government from profiting off of lending to young people. Sanders estimates that his plan would cost $70 billion per year — about $10 billion more than president Obama’s proposal for free community college. States under Sanders’s plan would have to put up $1 for every $2 the federal government contributes, shifting more of the cost of public higher education to Washington. The federal share of the expense would be offset by imposing a tax on transactions by hedge funds, investment houses and other Wall Street firms. (A convenient summary of the proposal, prepared by Sen. Sanders’ office, may be found here.)
If, as they say, imitation is the sincerest form of flattery, AAUP President Rudy Fichtenbaum should be sincerely flattered. For it was Fichtenbaum who first proposed using a financial transactions tax to fund higher education. In a working paper, “How to Invest in Higher Education: A Financial Speculation Tax,” published in early 2013 by the Campaign for the Future of Higher Education, Fichtenbaum, who is a professor of economics at Wright State University, argued that “One way to begin funding higher education more adequately and more fairly would be with a financial speculation transactions tax—that is, a tax on financial transactions such as trades in stocks, bonds, and selected other financial instruments.” According to one study cited in the paper, such a tax could raise between $265 billion and $354 billion a year, of which Fichtenbaum proposed using $75 billion a year to provide additional funding for public higher education.
I don’t know whether Sanders or his staff relied on or even read the Fichtenbaum proposal, but his bill is not only consistent with that proposal but well worth supporting, even if, as pundits agree, it is destined to go nowhere in the Republican-controlled Congress. According to Fichtenbaum’s paper, in 2012 the states collectively spent some $72.5 billion on higher education. Under the Sanders plan, to qualify for federal funding, states would need to maintain spending on their higher education systems, academic instruction and need-based financial aid. Sanders would also have colleges reduce their reliance on low-paid adjunct faculty, hire new faculty and provide professional development for professors. No funding under his plan could be use to pay for administrator salaries, merit-based financial aid or the construction of stadiums or student centers.
In a statement, Sanders said:
We have a crisis in higher education today. Too many of our young people cannot afford a college education and those who are leaving college are faced with crushing debt. It is a national disgrace that hundreds of thousands of young Americans today do not go to college, not because they are unqualified, but because they cannot afford it. This is absolutely counter-productive to our efforts to create a strong competitive economy and a vibrant middle class. This disgrace has got to end. . . .
There was a time, not so many years ago, when we in the United States understood the importance of making college available to all qualified students, regardless of income. A generation ago, our nation’s public colleges and universities were the pathways for all students, no matter their family background, to enter the middle class. For example, the University of California system, considered by many to be the crown jewel of public higher education in this country, did not begin charging tuition until the 1980s. In 1965, average tuition at a four-year public university was just $243, and many of the best colleges — such as the City University of New York — did not charge any tuition. And this investment in higher education worked – the United States once led the world in the percentage of young Americans with college degrees. Sadly, today, we are in 12th place. It is time for a fundamental change in how we approach the financing of higher education. . . .
I couldn’t agree more!