Here’s a simple way to make college more affordable | READER COMMENTARY
For The Baltimore Sun|
Mar 12, 2020 at 4:02 PM
Maryland should ask Congress for help with its homework (“On 529 college savings plans, Maryland just got schooled," March 11). Making college more affordable will require a partnership between states and the federal government. This is largely because tuition and fees at the vast majority of public and private colleges and universities continue to defy gravity — they only increase. With a block grant of $50 billion, the federal government could make college more affordable for generations. Especially with the recent downward trends of most major stock indexes.
If the U.S. Congress appropriated $50 billion for a college affordability initiative, 500 colleges and universities across the country could receive a $100 million grant for their endowment. With a 4% annual draw down, 500 students at each institution could receive $8,000 in need-based scholarships per year. Because endowments are perpetual pools of assets, even in volatile stock markets, over time the original grant will very likely grow making it possible to support more students annually.
This initiative could be paid for by income taxes from the future earnings of the college graduates over their careers and economic growth attributable to consumer spending. This is possible since, on average, college graduates have higher incomes over their careers.