A broad payments tax on the flow of money- at two-tenths of one percent (0.2%)- would generate enough revenue to let students attend college for free within limits. The new Challenge Program would pay up to $10,000 per year to cover college tuition but asks students to shop around to find affordable programs that are right for them. By incentivising students to select efficiently priced institutions, there is less student debt, and college costs decrease for everyone. Institutions want students, so many of them would lower tuition in a competitive environment. Easy credit currently allows for students to accept tuition rates that are too high.
Today total student debt exceeds a trillion dollars, and as the volume of debt increases, defaults are on the rise. In the 2015-2016 school year, more than 40 percent of students reached the loan limit of $31,000 for dependent students. The Challenge Program asks students to select universities that cost less than $10,000 per year and would in turn cover the full cost of their education. Dubbed the Challenge Program, the initiative challenges both students and educators to rethink their approach to education. The Challenge Program also challenges students to look at all the post-secondary options, in addition to a four-year college degree. Those include an associates degree, vocational training, certifications, and career-specific training like coding school.
There are an estimated 30 million jobs that pay at least $55,000 per year that don’t require a bachelor’s degree. Students would be encouraged to make the education choice that is best for their future and prospective careers. A payments tax would provide the revenue for free college tuition within limits. There are about 24 million college students; if all accepted the Challenge Program, the total cost would be $240 billion. Students would choose between taking advantage of the government-sponsored free tuition or using conventional loans to acquire debt for their college education.