Martin Lowy's Blog

The Education Solution proposes replacing federally guaranteed student debt, as well as Pell grants and tax benefits for higher education expenses with a stipend of up to $10,000 a year that would be available for tuition and fees to any qualified high school graduate attending a qualified school. Rather than being a loan, the stipend would be repayable only as a tax of 2.5% of a former student’s income, plus 1.5% for an additional ten years after repayment. A qualified school could be a 4-year college, a 2-year college or a trade school. $10,000 is sufficient to pay tuition at most in-state 4-year public colleges.

The principles behind the stipend program are:

  1. All federal support for college students should be repayable to the extent that the student succeeds economically.
  2. An equity partnership between the nation and the former student is fairer to both sides than a debtor-creditor relationship.
  3. No former student’s life should be adversely affected in any significant way by the support the nation gave for schooling.
  4. The government should be at least reimbursed, on average, for amounts it advances to support students’ educations.

The current system offers different types of assistance to students whose families have different levels of income. But Pell grants do not pay enough even for most 4-year in-state public colleges; tax benefits do not help lower-income students very much; tax benefits help high-income students somewhat (but not a great deal); therefore a majority of students from all income levels except the highest end up also taking subsidized loans. Those loans have, historically, had high delinquency rates, which have caused high levels of anxiety as well as ruined credit for a great many Americans who either have tried to get degrees and failed or have earned degrees but have not succeeded economically. That is not fair to the students.

It is not fair to the taxpayer that Pell grants and tax benefits are never repaid, no matter how successful the student becomes economically.

The current system, for these reasons, does not work properly for the taxpayer or for low-income families or middle-income families. And it provides tax benefits to wealthy families that they do not need.

The current system also is so complex that college counselors, who should be spending their time and knowledge helping high school seniors to choose the college that is best for them, end up spending a great deal of their time keeping up with the complexities and helping students and parents negotiate the system. The stipend system would help college counselors to do their jobs more efficiently.

Posted on 28 Feb 2015 by webadmin
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by profsandor @ 15 Apr 2015 11:08 pm
Gov't can & should do big things (once again). More Cumo than Reagan - my idea of genuine patriotism. Everyones goal ought to be better (more efficient and effective) gov't, not something to be drowned in a bathtub. Education is an investment not a burden from which we need relief. And it's not just education - look at US W Coast ports compared to Chinese ports. Could go on and on. Our greatest accomplishments were in large part gov't initiated and funded. Growing inequality is both dangerous and bad economics - a dose of real investment might not only restore genuine opportunity but also spur the economy. Reducing inequality is needed but politically unlikely given current and projected levels of polarization. The Education Solution offers tangible suggestions that merit serious debate and consideration. Although we may argue (and should) over the details of Marty's recommendations, his facts are nearly unassailable -- but, 1st we need political will and a renewed sense of community.
by FrankCoige @ 01 Jun 2018 02:44 pm
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by FrankCoige @ 02 Jun 2018 08:13 pm
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by Aly Chiman @ 03 Oct 2018 12:06 am
Hello there,

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by HowardEnure @ 24 Dec 2018 05:28 am
Hello. And Bye.

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