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Presidential contender explains how he’d pay for ‘free college’ bill

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Sen. Bernie Sanders

NEW YORK (CNNMoney) – Bernie Sanders has a higher education proposal he’d like to ride all the way to the White House.

The Vermont senator and presidential candidate has introduced legislation to eliminate undergraduate tuition at four-year public universities and colleges.

Sanders, a progressive waging a long-shot bid for the Oval Office, says the bulk of the cost could be covered by placing a small tax on financial transactions such as stock and bond trades.

Sanders acknowledges that Republicans in Congress would never support such a proposal, but he told CNN’s Wolf Blitzer that “the American people will go along with it.”

The proposal comes after President Obama announced plans earlier this year to make the first two years of community college free for students that meet certain requirements.

In addition to making public colleges free, Sanders also wants to do something about the nation’s $1.2 trillion student debt problem.

His bill, called The College for All Act, would lower interest rates on federal student loans, give graduates a chance to refinance existing loans at lower rates, and stop the government from making profits on student loans.

To fund the legislation by generating up to $300 billion a year, Sanders proposes instituting a 0.5% tax on trades of stocks and 0.1% tax on bonds and an even smaller fee on so-called derivatives, such as stock options and futures contracts.

The goal is to help reduce income inequality in America by making it less of a burden for lower-income students to get an education.

“We have got to make sure that every qualified American in this country who wants to go to college can go to college — regardless of income,” Sanders said in a statement.

By Ben Rooney, CNNMoney

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