There have been some exciting developments recently for students who wish to go to college but who may lack the resources to do so. In early January, the President announced his intention to propose the America’s Promise College Proposal, which is an opportunity for free community college for students attending a two-year college. The proposal includes part time students and is contingent upon the student being enrolled in a college where their credits could be transferred to a four-year university or that their institution of choice provides training that would lead to a job.
But there’s one overwhelming challenge that the President will face with this proposal: He must get it through a strong Republican Congress. From the outset of the announcement, conservative pundits have decried the proposal in various ways, including saying that it is an assault on the middle class because the proposal is dependent upon ending a key tax break on 529 college savings plans and would thus be executed at the expense of the wealthy. Progressives are calling foul on the criticisms and are arguing back that the changes would help build a broader tax credit for college savings.
A Money Magazine article addressed the concerns around the 529 savings plans by stating that: “529 investors tend to be wealthy. Families with 529’s earned a median annual income of $142,400 and reported a median of $413,500 in financial assets, according to the GAO.”
The same article also went on to state: “because earners typically owe higher taxes, the wealthy reaped large tax breaks from using 529s. In 2012, the GAO found that Americans who made less than $100,000 withdrew a median $7,491 from their 529s, saving just $561 on their taxes. But Americans who earned more than $150,000 withdrew a median of $18,039, saving $3,132 in taxes.”
Also, to counteract some of the effects of withdrawing the tax break, the President is looking to expand the American Opportunity Tax Credit (which at present is phased out for families that earn more than $180,000 per year) by using $2 billion of additional tax revenues that are raised.
The new plan to fund community college would cost roughly $60 billion over the course of ten years and would save roughly 9 million students an average of $3,800 per year. The program would also be of great benefit to those who live in states with the highest tuition. Also, middle and upper-income students who do not typically qualify for federal funding would now have an opportunity for aid.
Being from a small town that was fortunate to host a community college, I can see the benefits of extending this opportunity to students who wish to make better lives for themselves by increasing their knowledge and skill sets. Unfortunately for many – especially those from small towns in states that offer minimal funding – the costs that come with academic pursuits beyond high school are often too expensive and can deter individuals from developing and strengthening the marketable skills that would make them more competitive in today’s job market.
This program would not only remove the affordability barrier but also incentivize students to make good grades in order to maintain their debt-free status during their first two years in school. In turn, students who successfully complete their first two years would also do so with an increased ability to seek scholarships upon the transition to a four-year program.
If we wish to strengthen our nation by enhancing our workforce, then we must find ways to extend opportunities to the individuals who are willing to do the hard work that will make our communities stronger. Rather than continue to miss out on opportunities that we know exist but cannot meet due to an unskilled workforce, we should harness the energy that exists among our young and eager learners. After all, they are our future and an investment in them should, above all else, be considered a tremendous investment in our nation as a whole.