by NO Author Name

Created on: January 29, 2009   Last Updated: March 16, 2012

I believe that it is actually in the governments and America's best interest to make policies reducing the cost of higher education. With the cost of education continuing to rise with no end in sight, our country should be worried at the amount of debt individuals have to accrue to obtain a bachelors degree. While higher education is a private good that gives great benefit to the individual it is a quasi public good because it gives benefit to the individual and the public. The world market call demands highly educated and skilled workers, and also a strong consumer base; we can ensure both by helping our higher education seekers.

This past year we have seen what America's economy looks like when there is not enough spending power in the economy. We've seen financial institutions bailed out; we've seen the auto industry helped. I would like to see college graduates get a fair chance at attaining the lifestyle that their parents and grandparents enjoyed. I would like to see an economic package that would increase spending from our educated citizens who tend to make more money. I say we grant student loan forgiveness by major tax cuts for recent graduates of accredited institutions. Rather than releasing the capital to these recent graduates, I propose that we use the income taxes from these individuals to pay for their debt relief for up to 4 years.

I propose we have a national program for recent graduates of higher learning institutions and technical schools. As a nation we will say that graduates after 2006 will be able to take part in this program.

So for example:

A student who recently graduated has $40,000 in Loans.

Let's say that in 2009 he/she will make 35,000 of income.

So she/he will be taxed at 15% of his/her income:

$35,000 x 15%= 5250 for the first year and 21,000 after 4 years.

$40,000-21,000= 19,000 of debt for the student to pay.

Because the individual's taxes are being used to pay for his/her education, higher education can still be considered a quasi-public good because it benefits the individual and society. We can help our long-term stability by helping these students out of debt. These students will be able to spend at there highest capacity much sooner than prior to this policy. The revenues from a low debt consumer will be the ultimate measure of this policy. The policy will need about 4 years to evaluate, as we need to see how many of these students in this program consume at a higher level than the average American. We also need to look at the average age of homebuyers in this program compared to similar age graduates prior to this program. I believe that by helping these citizens, we will see a true economic renaissance to our economy.

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