Submission + - Let's Finance College With a Tax on All Graduates
Hugh Pickens DOT Com writes: As the number of students attending colleges and universities has steadily increased and the cost for most students has climbed even faster, student debt figures (both total and per person) have continued to get bigger. Now Josh Freedman at Forbes Magazine proposes a graduate tax-funded system of higher education, under which students would pay nothing to attend college upfront. Instead, once they graduate and move out of their parents’ basements, they would begin to pay an additional income tax (say, for example, three percent) on their earnings that would fund higher education. "In other words, the current crop of college graduates funds the current crop of college students, and so on down the line. There is no debt taken on by students, which minimizes risk (good); repayment is tied to income, because only people who make income pay the tax (also good); and it is simpler and more easily administrable than plans to make loans easier to pay off (still good)." The main argument for a graduate tax comes from its progressivity. Supporters of a graduate tax point out that most college graduates, particularly those from elite universities that use a greater share of resources, are richer than people who have not graduated from college. The state of Oregon made headlines last year for an innovative proposal called “Pay It Forward” to fund higher education without having students take on any debt. Pay It Forward amounts to a graduate tax: All of the graduates of public colleges in Oregon would pay nothing up front in tuition but would pay back a percentage of their income for a set number of years. These payments would build a fund that would cover the cost for future students to receive the same opportunity to attend college with no upfront costs. "As pressure mounts for more students from all backgrounds to attend college, it will become increasingly difficult to try to stem the rapid tuition inflation under a loan system," concludes Freedman. "Our current student loan system has made college more expensive, turned higher education into an individual, rather than a communal, good, and generated serious negative economic and social risks."
