A New Way to Pay for College
About five years ago, an old idea from Milton Friedman briefly made the rounds: Instead of charging students tuition and saddling them with lots of debt, colleges should let students attend for free; then, for a specified period of time, students should owe their alma maters a percentage of their income.
This has something to offer both sides of the political debate. Students of varying economic backgrounds would have the same access to college, and no one would drown in debt; anyone who remained poor after college would owe very little. Richer students would pay their own way instead of relying on their parents. Poorer students, rather than receiving subsidies, would pay when they could later afford to. And schools would have an incentive to focus on majors that actually produce returns in the labor market.
This arrangement has been almost unheard of in the U.S. -- but that might be changing. Reports The New York Times:
This week, the Oregon Legislature approved a plan that could allow students to attend state colleges without paying tuition or taking out traditional loans. Instead, they would commit a small percentage of their future incomes to repaying the state; those who earn very little would pay very little.
The proposal faces a series of procedural and practical hurdles and will not go into effect for at least a few years, but it could point to a new direction in the long-running debate over how to cope with the rising cost of higher education. While the approach has been used in Australia, national education groups say they do not know of any university in the United States trying it.
An interesting development, to say the least.
Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen