Students can Manage Debt More Easily without Burdening Taxpayers: Here’s How



The attorneys general of Kansas and Missouri are filing lawsuits against the Biden-Harris administration’s efforts to reduce student debt. In response, author Peter Gariepy proposes a federal program where the government pays for a student’s college education and in return the student pays incrementally higher federal income taxes until retirement. This program follows a pay-it-forward model that would only require taxpayers who directly benefit from the program to contribute, with contributions dependent on income levels.

Student Loans Issue and Proposed Solution

Student loans continue to burden millions of Americans, leading to separate lawsuits by the attorneys general of Kansas and Missouri against the Biden-Harris administration’s student debt relief efforts. This debilitating debt impedes the growth of individuals, families, and the economy.

Although the administration aims to alleviate past students’ debt, current and future students accepting massive personal loans for higher education remain impacted. This often affects families who compromise on business expansion, home buying, or retirement savings to help their children.

The call for a financially prudent and universally available way for students to access higher education without debilitating debt is critical. I propose that the federal government cover college fees for high school graduates, with the U.S. Secretary of Education negotiating tuition rates, similar to the Inflation Reduction Act.

Involved students would then pay incrementally higher federal income taxes until retirement, with no burden on their loved ones. Using the federal approach of taxing ordinary income at marginal rates, a pay-it-forward model could justly maintain this self-funded program, only asking those who benefit directly.

The proposed scheme implies a slight increase in funding for taxpayers moving up the tax bracket, with higher earners contributing more towards the program. Conversely, those earning less contribute less, making the program elective and funded only by its beneficiaries.

A 2013 study from Washington University in St. Louis showed that children three times as likely to attend college when they know funds are set aside for tuition. The impact of lowering higher education financial barriers could be significant for students and families nationwide.

While taxpayers may pay more in income tax between graduation and retirement than repaying student loans, they’ll know that tuition rates are heavily scrutinized and beneficiaries will start their careers debt-free.

Colleges could then focus less on financial aid and have more alumni free from the burden of repaying educational debt. This simple, fair, and inclusive program could lead to a generation of educated Americans entering adulthood and the workforce unburdened by student debt, moving us closer to the country we all deserve.

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