Joe Biden

Sen. Bernie Sanders Introduces Bill to Make College Free and Have Wall Street Pay for It

Evelyn Hockstein | Reuters

Free college could soon be a reality for many Americans.

Sen. Bernie Sanders, I-Vt., and Rep. Pramila Jayapal, D-Wash., on Wednesday introduced the College for All Plan, legislation that would make a college education free for millions and lend extra support to those from working-class families attending minority institutions.

"In the wealthiest country in the history of the world, a higher education should be a right for all, not a privilege for the few," Sanders said in a statement. "If we are going to have the kind of standard of living that the American people deserve, we need to have the best educated workforce in the world."

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The proposal comes amid a continuing debate over canceling student loan debt.

President Joe Biden said during his presidential campaign that he would support eliminating $10,000 in federal debt per borrower, and now he's tasked his secretary of Education with preparing a report on his legal authority to forgive up to $50,000.

"While President Biden can and should immediately cancel student debt for millions of borrowers, Congress must ensure that working families never have to take out these crushing loans to receive a higher education in the first place," Jayapal said.

Americans currently owe a total of more than $1.7 trillion in student loan debt, 93% of which is federally backed.

The details

The plan would provide tuition-free education for all students attending community colleges and public trade schools.

For students from families making less than $125,000 annually, tuition would be erased at public four-year colleges and universities, as well as public and private historically Black colleges and universities and other minority-serving institutions.

An annual $10 billion federal investment would be established to provide ongoing support to students at such underfunded institutions.

The bill would double the maximum Pell Grant award to $12,990, from $6,495, for the 2021-22 school year, make so-called Dreamers eligible for the loans and ensure that students could use the money for living arrangements and other nontuition expenses. It would also boost funding for programs that help low-income children, those with disabilities and first-generation college students.

"It is absolutely unacceptable that hundreds of thousands of bright young Americans do not get a higher education each year, not because they are unqualified, but because their family does not have enough money," said Sanders.

A tax on Wall Street to pay for it

The legislation proposed by Sanders and Jayapal is a big investment in education and comes with a high price tag.

The bill says the federal government will shoulder 75% of the cost of free college at public schools, with states paying the remainder. In the event of an economic downturn, the federal government's share would increase to 90%.

In addition, the bill proposes the government pay for free college by imposing a financial transaction tax on Wall Street, as in previous plans put forth by Sanders and others.

The Tax on Wall Street Speculation Act would levy a 0.5% tax on stock trades, a 0.1% fee on bond trades and a 0.005% fee on derivative transactions. That would raise up to $2.4 trillion over the next decade, according to a summary of the bill.

Such a tax has been criticized in the past. Business groups have spoken out against it, and some studies have shown it could harm middle-class Americans.

Still, those who support the tax see at as an equalizer.

"Thirteen years ago, the middle class bailed out Wall Street during their time of need, even as the middle class was struggling," the bill summary reads. "Now, it is Wall Street's turn to rebuild the struggling middle class by paying a modest financial transactions tax to make sure that everyone in America who wants to get a higher education can do so without going into debt."

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