A very interesting idea for funding college educations.

[rubato]

This is a brilliant idea, in my opinion. One objection to funding a University education with tax dollars is that the majority of the benefit goes to the few with the ability and desire to get an education while the cost is shared by all. A system like this would have the students who get the largest economic benefit from an education pay the largest amount in return. It would also remove the disincentive to pursue socially necessary fields of study which are not expected to pay as much.

This is keeping in mind that tuition only offsets a part of actual costs at state and non-profit private schools.



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http://www.huffingtonpost.com/2012/02/0 ... 62750.html
UC Riverside Student Develops New Way Of Paying For Tuition After College
Tuition Sign

The Huffington Post Tyler Kingkade First Posted: 02/ 9/2012 3:09 pm Updated: 02/ 9/2012 3:21 pm

Don't want to pay student loans anymore? Well, maybe you don't have to.

A group of students at the University of California Riverside have come up with a way to avoid ever taking out a student loan. Instead, the students will pay for tuition after they graduate by agreeing to give up a small percentage of their income for 20 years.

"Instead of charging students upfront for their education, students would attend the UC with no upfront costs whatsoever," Chris LoCascio, a junior at UC Riverside, told NPR.

LoCascio explains that under the Fix UC proposal, students would pay 5 percent of their income for 20 years.

Out-of-state and international students would pay 6 percent of their income back to the state, KGET reports. Those who go into the public sector in California would pay just 3.5 percent. Students transferring in would get a discount.

The estimated annual cost of attendance for an undergraduate at UC RIverside is $27,962. It has risen to that level after years of tuition increases and dramatic funding cuts from the state legislature. In response to the rising rates, there have been on-going protests and demonstrations-- sometimes leading to chaotic and violent incidents.

"We're distraught with the lack of solutions that were being put forward," LoCascio said. "The only reaction was to raise tuition."

However, students studying areas that typically pay higher salaries -- or at least have the potential to -- worry they'd get charged too much of their income.

"I don't know how much I'll be making and how much that 5 percent is going to be," Jose Rivera, a California State University business student told KGET. "Is it going to benefit me or bring me down, you know?"

UC president Mark Yudof said "In its current form, frankly, it's unworkable." He told NPR he prefers increasing taxes and the state contributions to higher education. But he does think college affordability is important.

"Having a loan program with income-adjusted repayment is a very appealing way to make sure that the middle class continues to have access to higher education," Yudof said.

Yudof said he was "impressed" when students presented the idea at a recent meeting of the UC Board of Regents, and his "best number crunchers" are reviewing the plan.

The group of students who developed the idea will meet with UC officials next month.
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yrs,
rubato

[Sue U]

I doubt it would be an effective way to maintain the university. The fact is that even after six years, barely half of college students have earned a degree (at "non-elite" institutions it's only around 40%), so if repayment is keyed to graduation, my guess (without actually running the numbers) is that it's most likely a financial loser. But really, if you take away the graduation part, in substance this is not really any different than an adjustable-rate loan with a 20-year payback -- it's just that the "rate" is effectively set by the borrower's income. I question how attractive this would be for those looking to go into high-income jobs, since the effective interest rate for high earners will likely be substantially in excess of market rates; it just makes more economic sense to go with a conventional loan and take the income-percentage hit up front in one's low-earning early years rather than paying substantially more dollars in later years. Also, how would you keep track of who is earning what, year in and year out?

[Liberty1]

In New Mexico, college is free to any state resident who qualifies for entry and maintains a 2.5 GPA. Tuition is funded by the state lottery. This way it is only paid for by those wanting to participate, both the lottery players and the students. It has been a very succesfull program implemented in the 90s by Gary Johnson.