Now that America’s college graduates (and college dropouts) are under-employed by the millions and awash in $1.2 trillion in collective debt, skyrocketing tuition prices over the last four decades are finally receiving some political attention.
A liberal nonprofit group believes it has found the solution: Just make in-state public colleges free for academically-qualified student from families with a household income lower than $180,000 per year. The innovative solution also involves burdensome price controls.
The Kalamazoo Promise program provides funding up to 100 percent for any graduate of the city’s public schools who attends state colleges and universities in Michigan.
The Kalamazoo Promise is “funded entirely by a small group of anonymous donors,” according to its website. Taxpayers are not involved.
Redeeming America’s Promise would not rely on anonymous donors. Instead, it would involve a very convoluted set of federal transfers and new federal regulations.
The group claims the massive new entitlement program would come from the money that currently pays for Pell Grants and certain tax credits.
The group would do away with Pell Grants and those tax credits, exchanging one pile of taxpayer-funded stuff for another pile of the same taxpayer-funded stuff.
In order to qualify for a full-tuition (or mostly full-tuition) scholarship at any public college or university under the group’s plan, students would need to obtain a 2.75 grade-point average in high school. Students with lower GPAs would get to go to community colleges for free.
But what if public colleges raise prices? No problem! The Redeeming America’s Promise plan will innovatively prevent such price increases by instituting price controls.
“Public colleges and universities would not be allowed to charge families who were residents of their state more for tuition than the value of the” scholarship “established for their state,” the group explains.
The value of the scholarships would increase each year based on the Consumer Price Index, which implies that public colleges and universities could only increase tuition prices based on the government index.
The scheme would institute further government price controls by requiring state colleges and universities to link in-state tuition “to what the average family can afford” instead of the actual “costs per student.”
How would state governments pay for the tuition reduction? They would “use rising revenue from a growing economy to pay for any additional costs.”
The Redeeming America’s Promise planners don’t appear to have a strategy in the event of a shrinking economy. Hopefully, of course, that never happens.
The Redeeming America’s Promise plan would also “write off” five percent of every college student’s loans for each year of college they completed. It’s not clear if banks or taxpayers – or both – would be left holding the bag for this massive loan write-off. Whatever the case, the write-off would double for anyone “who completes at least two years of approved community service after graduation” and triple for anyone “who serves in the military for at least two years.”
Redeeming America’s Promise is run by Morley Winograd, an older, balding man who calls himself “a nationally known expert on the Millennial generation” and a couple of guys who served as minor bureaucrats in the Carter and Clinton administrations.