The way to help America get ahead in the global economy is to give Americans the tools to get ahead in the 21st century. College is vital to America's success in a competitive world, and to expanding and strengthening the middle class here at home. A college education and training are key to individual advancement, and a workforce of college graduates and highly trained workers is the key to giving America a competitive edge.
America needs a bold new plan to produce one million more college and community college graduates a year by 2015 -- so that within a decade, America will be a nation in which more than half the young people finish college with a degree, and any student willing to work part-time or perform community service can go to 4 years of college tuition-free.
From the land grants of the 19th century to the GI Bill after World War II, opening the doors of college built the great American middle class. Today, the U.S. is blessed with the finest colleges on earth, but too many young people can't afford to go to college, and too often don't graduate. The U.S., which used to rank 1st in the world in the percentage of young people with a post-secondary degree, has fallen to 7th. This graduate gap is hurting our competitiveness abroad and income growth here at home.
The cost of college tuition has exploded at the very time a college degree matters most. Over the last five years, the average tuition at a public university has increased by more than 50 percent, to $5,500 a year. Instead of making college more affordable, the Bush administration and Republican Congress have done the opposite: Earlier this year, the president signed a budget reconciliation bill that slashed financial assistance by $12.7 billion, the largest cut in college aid in history.
We need a bold new plan -- fully paid for by cutting wasteful corporate subsidies to make college affordable again, challenge every young person to attend, and hold the system accountable for producing more college graduates. The plan includes:
- A new, performance-based American Dream Grant that will award states $150 billion over 10 years to reduce tuition and increase graduation rates.
- Tax reform to consolidate existing incentives into a single, refundable $3,000 college tuition tax credit to cover 4 years of college, grad school, and training.
- Increased incentives and accountability for colleges to raise graduation rates, and more flexible college aid to help adult students balance work and family.
Seven score and four years ago, in July 1862, Abraham Lincoln and the national government gave states land grants to build the finest public college system on earth. Today, we must act in the same spirit, by giving states grants to make public colleges more affordable and produce more college graduates. With college so crucial to America's economic future, states and communities shouldn't have to bear the burden alone. For the last two decades, state budgets have been burdened with the soaring cost of health care, and state appropriations for higher education have stayed flat. That left parents and students to pick up the slack: The average annual tuition at a 4-year public college has gone up about $2,000 in the last five years alone.
It is time to make college affordable, and hold students and colleges accountable for results. We propose a new, performance-based American Dream Grant that will award states money each year based on the number of students that attend and graduate from their colleges and universities. Over the next decade, this block grant will provide states $150 billion to reduce tuition and increase graduation rates.
With the national government as a partner, states will be able to launch new efforts to make college more affordable, and expand efforts already under way. Each year, states will receive money based on the number of students who attend 2- and 4-year colleges, universities, and community colleges, and the number who graduate. In return, states will agree to maintain current higher education spending, hold tuition increases to the overall inflation rate, and spend the funds on two purposes -- making college more affordable and increasing the number of graduates.
The block grant will provide states an average of roughly $2,000 per student, which -- along with the new $3,000 college tax credit outlined below -- will offset most of the tuition cost at the typical 4-year public college. With the block grant, states would be able to make 4 years of college tuition-free for students willing to work part-time or perform community service.
To help students and families pay for college, Washington has layered one new tax break upon another and created a confusing, often contradictory system. There is no uniform definition of qualifying education expenses, different income limitations for different incentives, and much of this assistance comes with massive bureaucracy attached.
To make college as universal as high school, college aid needs to be simpler and more generous. We should simplify the tax code by replacing the HOPE tax credit, the Lifetime Learning Tax Credit, and the higher education deduction with a single, refundable $3,000 college tuition tax credit to help offset undergraduate and graduate costs for all families. This new credit will cover up to 4 years of college, graduate school, and training. Net cost: $70-80 billion over 10 years.
In return for this unprecedented increase in college aid, we must raise expectations for colleges and students alike, and address the high proportion of college students who leave without a degree. Students who don't finish college don't earn much more than their counterparts who never entered. We must challenge young Americans to go to college and graduate, and challenge colleges to do their part to make it happen. Colleges need to publish complete data on their success rates, and schools with chronically low graduation rates must present a strategy to increase them. Colleges should provide truth-in-tuition by setting multi-year tuition and fee levels so incoming freshmen know how much 4 years of college will cost.
We also need to invest in reforming our elementary and secondary schools to put more students on the road to college. That means smaller schools, higher standards for teachers as well as higher pay, and courses aligned with the demands of college and employers. We should make it easier for students to take college courses while still in high school, and offer them more rigor and more relevance as they choose a career path.
The U.S. Census indicates that every year of post-secondary education raises a worker's annual earnings. Helping these students succeed is not only good for the families that rely on them; it is essential to our economic prosperity.
Non-traditional students are becoming the norm on college campuses; the percentage of non-traditional students -- excluding those participating in adult education that will not lead to a credential or degree -- has increased to 47 percent in 2001 from 34 percent in 1991. These undergraduates are more likely to be balancing school with work (40 percent work full-time, up from just a quarter) and parenting (27 percent have children, up from 20 percent) than they were 15 years ago. These students face unique challenges to completing college -- affordability; balancing work, school, and family responsibilities; overcoming inadequate academic preparation; and navigating the college environment.
We should pass Sen. Hilary Rodham Clinton's Non-Traditional Student Success Act, a comprehensive bill to help students who are attending college while raising children, working while studying, or facing other such challenges. This legislation would make Pell Grants available year-round, boost awareness and information about available financial aid, provide financial aid to students who are attending school part-time, and expand access to child care by providing supplemental grants for working parents with young children. In addition, this legislation would create incentives for institutions to customize their courses to help students successfully complete remedial work and graduate into academic programs.
To provide opportunity for all Americans, we must hold Washington accountable for the Responsibility Era this administration promised but never even tried to deliver. Over the last five years, the national debt has more than doubled. The Bush administration ushered in runaway spending and tax cuts for the wealthy, putting us deep in debt to our economic competitors even as we must fight a prolonged war on terror.
A country built on its belief in the future shouldn't be doling out special interest favors that will leave us worse off down the road. If we're willing to restore accountability to government, we can cut the deficit and make important long-term investments at the same time.
- Cutting Wasteful Corporate Subsidies
This administration and Congress have turned Washington into a cash machine for narrow interests. The U.S. now spends scores of billions every year on wasteful corporate subsidies that distort the market and discourage competition. We need to create an independent, non-partisan commission to scrutinize and propose the elimination of wasteful, outdated business subsidies. By presenting its recommendations to Congress for an up-or-down vote, this commission would produce an estimated $200 to $250 billion in savings over 10 years.
When we think of the pillars of the American Dream, college is the most desired and least attained. About 70 percent of Americans own their home. About 85 percent have health care. An estimated 42 percent own retirement accounts. But only about 30 percent have achieved the dream that can do the most to make other dreams possible and put other worries to rest -- a college degree.
- A College Degree Means a Higher Income:
- Over the past three decades, virtually all economic and income gains have gone to college graduates.
- The income gap between college graduates and high school graduates has more than doubled since 1980. College graduates now earn nearly twice as much as high school graduates -- an extra $20,000 per year. Those with some college education but no degree enjoy little of that advantage and have seen little gain.
- For today's 22-year-old, a college degree means a million-dollar bonus over the course of a career.
- College Is the Key to Better Jobs:
- Producing more college graduates will make our economy grow faster by driving innovation and attracting more high-value, high-paid jobs.
- According to the Bureau of Labor Statistics, 42 percent of the new jobs this decade will require postsecondary education, as compared to 29 percent of all jobs in 2000.
- The College Dropout Rate Is a Growing Problem:
- As The New York Times has noted, nearly a third of Americans in their mid-20s are college dropouts. When the Census Bureau began keeping track in the late 1960s, the rate was one in five.
- The Education Department found high-income students are over 50 percent more likely than low-income students to graduate in 5 years.
- Over the past 20 years, the U.S. has made some progress in the percentage of young people who go to college, but college graduation rates haven't kept pace. About 9 million students attend 4-year colleges full-time, roughly two-thirds of them at public institutions. Each year, approximately 1.4 million of those students graduate -- 900,000 from public institutions, 500,000 from private ones. About 500,000 students a year drop out of 4-year colleges.
- Too many students don't go to college because it costs too much, and too many who do go don't finish. Between 1980 and 2005, college tuition costs increased faster than inflation every single year. Half of all full-time public college undergraduates take out student loans, averaging $5,600 per year.
