Private College Student Loan

A better proposal for student loans?

Tell me what you think -- would this be a fairer way to handle student loans? Federal government provides $15,000 a year student loans to each citizen, and permanent residents, in exchange for their lifetime commitment to pay an additional 1% income tax. A student who takes the loans for four years would then pay an added 4 percent income tax for life, and someone who goes to law school, taking three added years, would pay 3 percent on top of his/her repayment obligation for undergradaute school. Same eligibility rules for schools as we presently have. "Need" by student does not have to be proven, just proper enrollment and citizenship. Student loans would not be affected by bankruptcy. If you get married, the average student loan tax rate then applies to the total income of the family. In addition, student loan tax rate applies to your estate [on top of regular estate taxes, if any are due]. {and yes, persons who later leave the US are still liable for this added tax -- they agreed, after all.} Program to be entirely funded by the Treasury, which issues the usual bonds to provide funding. All required paperwork to be handled by the college financial aid officers, the IRS, and the Dep't. of Education. *** I submit that this program would be cheap to operate, self-funding in the long run, and completely non-discriminatory. Any improvements or thoughts? Maxwell -- the higher tax is for life. In effect, this requires the student who is extraordinarily lucky [the one who becomes a CEO] to subsidize the education of his employees who didn't become CEO. There is no individual account as such, so it can't be "paid off". Lots less record keeping that way, too.

Public Comments

1. That's very interesting and very profitable; a voluntary tax increase would be great. I can hear someone saying that it's a way to attack the middle class and poor by increasing their taxes. their alternative would be to giv ethem nothing.
2. Sounds like it may have some merit. Although, if someone gets money to go to school, and then chooses to stay at home and be a "stay at home mom/dad/spouse" will effectively have no income, and as such, no income tax in which to repay their obligation. EDIT: and Polly M, why must you add in your partisen anger into a non-partisen discussion. Not productive. EDIT2: also, is there an end to the tax increase? or is it for life? Depending on when you go to college, and how much money you end up making a year, you may never pay off your loan obligation, or you may end up paying it off hundreds of times over. Like a high payed CEO, who only has a $100,000 education, but makes a few million a year. Who gets all the extra money that person pays back for decades?