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The American College
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Roomberg
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Fact Sheet White
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(For the complete story, download the White Paper.) 1. It is a complete college funding solution. The RTS© is a loan alternative, where the taxpayer can borrow all or any portion of their college education and then repay that education with 10% of their annual income, until the debt and related interest and fees are repaid. 2. It requires no new government taxes or increased government borrowing. By redirecting the 65 billion dollars in existing federal tuition programs into RTS© guarantees and subsidies, the impact of the RTS© will be to provide universal and complete financing of college educations without increasing the federal government’s deficit. 3. Repayments are limited to 10% of the borrowers income. The RTS© payments are made by increasing the taxpayer’s base tax rate by 10 percentage points, and then increasing the related withholding and end-of-year tax payments to the IRS. By limiting payments to 10% of an individual’s income, repayment of college loans are possible for almost all citizens. 4. Securitized loans will provide investors with a secure investment that may be as or more reliable than mortgage-backed securities. Interest rates on the RTS© will be fixed for the loan duration and set by private investors who can purchase the RTS© Bonds from the US Treasury. (Actually bundles of 100 or 1,000 loans that can then be broken up and resold in a manner similar to mortgage backed securities.) 5. Immunity from most bankruptcies results in low interest rates and low default rates. As the knowledge asset created by the education is thought to be immune to dissipation from financial mistakes, bankruptcy will not effect repayment obligations toward the RTS©. As the loans are immune from bankruptcy, the RTS© interest rates should be among the lowest available. 6. Administrative costs should also be very low. As the RTS© loan payment collection is part and parcel of the existing federal tax collection mechanisms, the administrative costs incurred by the government in collecting loan payments should be a fraction of a percent. 7. The Roomberg Taxpayer Scholarship©: o funds up to $2,000 per course, adjusted for inflation. For most colleges, this will cover tuition, meals, board, books, and fees. o funds up to $20,000 per year, $80,000 through bachelor’s, $120,000 through master’s and $160,000 through doctoral degrees. 8. RTS© will adapt to the changing economy. RTS© maximum loan amounts will be automatically adjusted for inflation annually 9. RTS© provides limited help to part-time students. RTS© loans to part-time students are only for tuition, books, lab fees, and registration fees. 10. RTS© is focused on career preparation. It is available only for accredited academic courses at accredited colleges and universities
RTS© Details: 1. Restrictions on trade and non-academic schools. As the market for many skills taught by trade schools fluctuates, RTS© loans will be available for federally recognized trade school institutions only to the extent that debt repayment will be limited to eight years, and further limited to professions where the department of labor certifies the likely demand and likely income for the skill or trade in question. 2. Universal availability. RTS© loans will be made available to all citizens not currently in default to any government agency debt. 3. RTS© loans requires student commitment. In any semester that a student’s average falls below “C,” the student’s ability to borrow further funds will be suspended. Until that student then completes an entire semester of at least five academic courses with at least a “B” average, no further funds will be made available to that student. 4. RTS© loans are an obligation that must be satisfied. RTS© loans must still be paid even if the graduated student then works overseas or renounces US citizenship or files for bankruptcy. 5. Payments for Married Joint Filers. If a student marries, files taxes jointly, and their spouse also has outstanding RTS© loans, then 10% of gross household income will be split between the two debts. 6. Payments for Married Individual Filers. If a student marries, files taxes separately, and their spouse also has outstanding RTS© loans, then 10% of each filer’s income will be applied to their individual debt. 7. Payment The RTS© loans will come with a built-in life and disability insurance premium paying off the balance of debt if the student dies or becomes 100% disabled. Possible Variations: 8. Limited parental contributions. In years where the income of the student is less than $20,000, parents of the student may be liable for a portion of the interest on an RTS© by a child up to a maximum of two percent of the parent’s adjusted gross income for a period of no more than twenty years, and also terminating upon complete loan payoff or death of the parents. 9. Parental contributions for multiple children. Parents of non-emancipated children may be liable for a portion of the interest on a The Roomberg Taxpayer Scholarship by multiple children, up to a maximum of five percent of the parent’s adjusted gross income for a period of no more than fifteen years, and also terminating upon complete loan payoff or death of the parents. The parental payments will be split evenly between the obligations of all of their children with RTS© loans. There are no limits as to the number of children in a family who receive such loans. 10. Restricted to citizens. RTS© loans are available only to citizens of the country issuing the loans. 11. Restricted to domestic institutions. RTS© loans are for attendance in educational institutions located in the United States, its possessions, and military bases. For schools whose study includes an overseas exchange program, RTS loans can be used for up to one year starting after the completion of one year within the United States. 12. Loan restrictions. The RTS© available loan amounts may be limited based on two variables.
13. Further loan restrictions on incarcerated individuals. As the maximum RTS© loans include room and board, RTS© loans made to incarcerated individuals may only cover tuition, books, lab fees and school registration fees. RTS loans available to incarcerated individuals will be reduced to account for actual projected income and work years once released from incarceration. These restrictions will effectively restrict RTS© loans to those incarcerated individuals most likely to be productively returned to society. 14. RTS© loan source, guaranty, and subsidies. As of 2003, the federal government annually spent 65 billion in direct financial aid to students. (*3) The government may reallocate these funds to make minimum payments on behalf of students whose annual income falls below a certain level, or who are faced with medical or other hardships, or to provide incentives for particular jobs such as inner city teachers and rural doctors, or to provide loan guarantees to RTS© bond holders. 15. RTS© promotion. Every elementary and secondary school in the country will be able to continually send home communications that every student who performs up to academic standards is eligible. (For the complete story, down load the White Paper.) |
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