Bernie Sanders Proposes New Hedge Fund-Wall Street Taxes to Pay for Universal College Tuition

May 20 2015 | 9:15am ET

Sen. Bernie Sanders (I-Vt.) introduced legislation to make four-year public colleges and universities tuition free for students and plans to pay for it by introducing new taxes and fees on Wall Street banks and hedge funds. 

“We live in a highly competitive global economy. If our economy is to be strong, we need the best educated work force in the world," said Sanders. "That will not happen if every year hundreds of thousands of bright young people cannot afford to go to college and if millions more leave school deeply in debt.”

Under the legislation, $70 billion a year in assistance – two-thirds from the federal government and one-third from states – would replace what public colleges and universities now charge in tuition and fees. The federal share of the cost would be offset by imposing a tax on Wall Street transactions by investment houses, hedge funds and other speculators. 

“A .5 percent speculation fee will be charged on investment houses, hedge funds, and other stock trades. Additionally, a .1 percent fee will be charged on bonds, and a .005 percent fee will be charged on derivatives,” Sanders said.

The legislation also would overhaul student loan programs to alleviate debt loads. Federal profits on loans would be eliminated.

Tuition at four-year public colleges and universities rose by 50% in the United States over the past decade. With this spring’s college commencement season underway, the class of 2015 is the most indebted class in American history, according to Mark Kantrowitz, publisher of Edvisors, a website on college costs and financial aid.

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