On his Fox News Channel program Monday night, Tucker Carlson proposed a radical idea that conservatives should embrace: Make the higher education establishment help pay off the student loan burdens of the Americans who were talked into taking out this debt.
His logic is more sound than it appears at first blush: It was higher education that told these people they needed to go into debt in order to achieve the American dream, and it’s been college diversity officers and campus Marxists who have directly benefited from the inflow of cash. The resulting debt is making Generation Z and millennials socialists.
So make higher education pay for what they broke.
There’s a good way to do this that makes policy sense. As part of the Tax Cuts and Jobs Act, a 1.4% excise tax was imposed on college endowments to the extent that they exceed $250 million per year. President Trump should supplement this tax with a much bigger one, and one that most affects Harvard University’s own Elizabeth Warren.
Trump should propose a one-time excise tax of 100% on any endowment amount exceeding $10 billion as of the beginning of this year. This would affect about a dozen college endowment funds, including liberal bastions such as Harvard, Yale, Stanford, Princeton, MIT, the University of California, and Columbia. Such a tax would raise $120 billion, according to public endowment disclosures. Each of these colleges would still have $10 billion in their endowments after the application of the tax.
Forty-four million borrowers have an average student loan debt of $37,000 — as Carlson says, enough to buy a car or put a down payment on a home. Trump should propose giving that $120 billion back to borrowers in the form of a student loan repayment tax credit. It would only be available to working, middle-class folks with real jobs — plastic surgeons and trial attorneys making high six-figure incomes would be ineligible. For everyone else, they would get a one-time nonrefundable tax credit of $5,000 on their student loan payments, a big chunk of relief.
Colleges should not get to rack up huge, multibillion-dollar endowments while younger workers struggle to pay off student loan debt. Democrats who want hardworking taxpayers to write the check to pay off student loans have it wrong. Trump has a chance to turn their idea on its head and make wealth tax-supportive Warren choose between her voters and her alma mater.
Ryan Ellis (@RyanLEllis) is president of the Center for a Free Economy.
