Hillary Clinton’s “New College Compact” isn’t exactly out of Robin Hood’s book, but it contains the spirit of Mr. Hood’s famous redistribution mantra, along with a pinch of Steve Forbes’ flat tax rate proposal. The interesting Forbes part is this: Clinton wants to limit debt repayment to at most 10% of a borrower’s current income — a flat rate. That detail comes close to aligning a college education directly with job training, essentially charging borrowers with paying back a percentage of how much their education is valued by the marketplace — in other words, pegging it to their post-education earning power. If the education turned out to be a good value, the lenders get more return.
The Robin Hood aspect of the Clinton plan is the large proposed increase in grants and loans available to students at public colleges, paid for by tax increases at the top end. Clinton has proposed a $350 billion incentive program for states that provide tuition at four-year public universities and colleges, money allocated over ten years. Clinton says bluntly: “no student should have to borrow to pay tuition at a public college.” The education windfall will come courtesy of changes in the tax code that target high-income earners. 40 million Americans have student loans, according to Clinton.
