OPINION:
Student debt is the latest hot button issue over which Americans are arguing, but there’s an obvious solution to the problem — a solution that no one is talking about.
Extreme partisans on the left, like Rep. Alexandria Ocasio-Cortez, want the government to forgive up to $50,000 of student debt to all student borrowers. President Biden wants the government to forgive up to $10,000 of student debt to all student borrowers. And most Republicans and conservatives don’t want the government to forgive any student debt, rightly pointing out that doing so is making taxpayers pick up the tab for a bill that was never theirs in the first place.
There’s a better solution. Make the universities help pay.
The vast majority of universities and colleges, both public and private, have 501(c)(3) status and are tax-exempt by the IRS. This should change.
Over the years, colleges and universities have continued to raise their tuition costs significantly. In fact, the average cost of college tuition and other fees at public four-year institutions has risen 179.2% over the last two decades for an average annual increase of 9%, while the average cost of tuition and fees at private institutions has risen 124.2% over the same period for an average annual increase of 6.2%.
We hear a lot about inflation these days, but the rise in the costs of college tuition has outpaced the rate of inflation by 171.5%. The average annual salary for a dean of students in America is nearly $85,000. They might serve educational purposes, but these institutions are clearly profiting, and they should be taxed for it.
Indeed, the only thing growing at a faster rate than the cost of college is the sizable endowments that these institutions guard like dragons protecting their treasure hoards. Last year, when most Americans were still suffering the economic consequences of the COVID-19 pandemic and beginning to face an even harsher economic reality of sky-high inflation and ever-rising costs, colleges and universities were swimming in money.
A study by the National Association of College and University Business Officers and the Teachers Insurance and Annuity Association of America revealed that the average university/college endowment increased by a whopping 35% in 2021, leaving 19% of America’s colleges and universities with endowments worth more than $1 billion. One. Billion.
Think about it. If we are to tackle the problem of student debt — and with an estimated one in four Americans who owe it, it’s certainly a problem — then why not tackle it at the source?
American colleges and universities have been consistently raising costs for students, driving them into debt, while pocketing insane profits from their endowments, all the while paying zero taxes to the government. That means the American taxpayer —you and I — are subsidizing these institutions, some of which have more assets than hedge funds. That’s not to mention the central part they’ve played in promoting extreme leftism, radicalizing students and as a result fueling division in American society.
The Republicans are likely to seize control of the House in 2022, and when they do, I propose they form a committee to examine the ways in which universities and colleges could be taxed to help cover the costs of America’s astronomical student debt bill that they helped run-up. It’s time to make America’s colleges and universities pay their fair share.
• Julio Gonzalez is the founder of Engineered Tax Services.
