Free College on Wall Street's Tab? 5 Reasons the Finance Sector Should Pay for Full Tuition at Public Universities
It’s now crystal clear that our economy is not producing enough jobs for all who want and need them. It’s also clear that our economy is doing an excellent job at putting more and more wealth in the hands of the few. It’s time to change this equation with one simple proposal that would put millions of Americans back to work in a matter of months: free tuition at all public colleges and universities.
The spinmeisters can’t hide the fact that unemployment is still at horrendous levels and causing enormous suffering for millions of Americans. Job growth is so paltry that at this rate it will take over a decade to return to full employment. Worse still, there are 5.8 million Americans who have been unemployed for 27 weeks or longer, the highest number since the Great Depression. Meanwhile, Wall Street, which caused the economic collapse, is returning to record profits and bonuses. We can no longer afford to wait for the trickle-down economics to put our people back to work. And we can easily afford a free higher education program provided we have the nerve to make Wall Street pay for it.
We’ve Done it Before
At the close of WWII, policy planners worried that the return of 12 million soldiers to the civilian workforce would bring back the Great Depression. To combat this possibility, Congress passed the Servicemen’s Readjustment Act of 1944, which became known as the G.I. Bill of Rights. It provided $500 a year for GIs who attended technical or higher educational institutions, which was more than enough to pay tuition at any college in the country. (Harvard cost $400 a year at that time.) GIs who went to school also received a generous stipend as well. As a result, the number of college degrees more than doubled between 1940 and 1950. Overall, 7.8 million veterans went to school on the GI Bill.
Was it worth it? In 1988, the Joint Economic Committee analyzed the impact of the GI Bill on the economy. The program cost taxpayers approximately $70 billion (in 2010 dollars). However, the committee estimated that the GI Bill generated an extra $120 billion in federal tax revenues and $350 billion in extra national output. Overall, for every one dollar invested in this massive educational program, $6.90 was returned to the economy.
We Could Do it Again, Right Now
Today, students and parents pay approximately $50 billion per year in tuition for two- and four-year public institutions of higher learning. As a result, families have run up a mountain of debt – there are $850 billion in outstanding student loans (which is more than credit card debt). Clearly, the educational burden on family budgets is enormous. Through a program of free higher education we could dramatically improve our economy, almost overnight. Here’s a brief list of what such a massive dose of trickle-up economics could do for our society:
1. Millions of Unemployed Workers Would Go Back to School: Those without jobs, or stuck in dead-end, part-time jobs, are likely to rush back to school, especially if they are permitted to keep drawing on their unemployment benefits. But, even those without such benefits would see higher education as a way back into the modern global economy. We should expect the number of those entering college to double. It is highly likely that a free higher education program would drop the unemployment rate by 1 to 2 percent in a matter of months.
2. Colleges Would Generate a Major Construction and Work Boom: We can be certain that tuition-free higher education would lead to a dramatic expansion of public colleges and universities. New facilities and entire campuses would have to be constructed to meet the influx, and more faculty and staff would be hired. If, as expected, a free tuition program doubled the number of students at public colleges and universities, we could expect to add approximately 1 million additional jobs on campuses and in their surrounding communities – jobs that cannot be outsourced.