Is the American Dream Worth Saving?

Amidst the international focus on terrorist plots, Middle East peace negotiations and the quagmire in Iraq, an interesting proposal from the Democratic party was announced a few weeks ago with little fanfare and even less attention. Entitled, “Saving the American Dream,” the plan intends to cut education costs and increase the number of college graduates over the next decade by at least one million.

The impetus for this plan comes from the stark realities of the erosion of the American higher education system. Despite the controversial and highly politicized Commission on the Future of Higher Education, it is hard to argue that America has the finest colleges and universities in the world.

However, the United States has fallen from first to seventh place in the world in terms of the percentage of young adults who hold a college or university degree. Too few high school students attend or complete college, resulting in a serious decline in international competitiveness and a significant loss of personal income. The implications of both of these realities have been widely discussed and reported.

• While the causes of this decline are many and complex, the Democrats focus on two important and irrefutable facts. In a time when a college degree has never been more important, it has become less affordable. Fact #1 … tuition costs continue to rise, especially at public universities where costs have increased by more than 50% in the last five years. Fact #2 … federal financial aid has not kept pace with this increase in tuition and has actually declined for most prospective students.

  “Saving the American Dream” is a straightforward plan. It proposes to provide $150 billion in block grants to states based on their attendance and graduation rates at public universities. The purpose of these block grants would be to hold down tuition increases to a rate no greater than the rate of inflation. The funds from these grants would be used to increase the number of college graduates and to make higher education more affordable.

The second component of the plan is a single, refundable $3,000 college tuition tax credit. This tax credit would replace the HOPE tax credit, the Lifetime Learning Tax Credit and the current higher education deduction. This tax credit would be available to families supporting students in undergraduate, graduate or training programs for up to four years. If a family was too poor to owe taxes, the credit would be received as a refund.

The plan also requires the involvement of colleges and universities. Higher education institutions would be required to publish complete data on their graduation rates and set their tuition and fee levels for four years at a time. If graduation rates are low, institutions would be required to develop a strategy to increase them. “Truth-in-tuition” would help families and non-traditional students plan better to afford to complete their degrees.

This plan is worth careful consideration. As always, funding will be a challenge. The Democratic proposal calls for funding these initiatives through the closing of corporate tax loopholes and the collection of unpaid taxes. Whether this plan or another, the goal of increasing America’s graduation rates should be a national imperative.

Study after study reaches the same conclusions. A college degree means a higher personal income. College graduates earn almost twice as much as high school graduates, on average, about $1 million during a person’s career.

A college degree will result in a better job. In fact, more than half of the jobs in the coming decade will require a postsecondary degree. Studies also report that a college degree provides for greater professional mobility and improved quality of life.

• The American Dream still held by most of us is a good job, a nice home and a high quality of life. According to this Democratic Plan, “When we think of the pillars of the American Dream, college is the most desired and the least attained. About 70 percent of Americans own their home. About 85 percent have health care. An estimated 42 percent own retirement accounts. But only about 30 percent have achieved the dream that can do the most to make other dreams possible and put other worries to rest – a college degree.”

  The American Dream is neither Democratic nor Republican. It is neither liberal nor conservative. It is neither public university nor private college. The American Dream belongs to each of us … all of us. And … the American Dream is worth saving.