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Financing 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.'"
So under this new system, why would I ever stop going to college? This is already a problem with some of the higher level institutions.
called HECS.
http://studyassist.gov.au/site...
It began in the 1990's and was developed by the economist Bruce Chapman.
https://crawford.anu.edu.au/pe...
It is a great success in Australia. I graduated under the system. It was perfect for me, because I had no money to study but made some after and payed the loans through my taxes.
No, it is not good idea. Everyone benefits from an educated workforce. The self-made entrepreneur benefits from employing graduates. The store worker benefits from the graduates that built the business employing them.
If we accept that taxation is they way to fund education, the smart move is to do it through general taxation. Since everyone benefits from education, everyone pays a share. And you drop the administrative costs associated with managing loans or adding a section to the tax code.
I agree, this is a horrible idea. The rate of students actually graduating in 4 years is already low, it will just go down as soon as students are attending for "free". There might be some minor improvement if there were a competitive process and only the students who gave a crap about their education would qualify. But this notion that every slacker has a "right" to attend and fart around for six years is a disaster. When I went to graduate school, anyone could tell, with a high degree of accuracy, which students were paying their own way and which were not. The ones paying for it were the ones who worked hard and tried to get something out of even the easy classes. The other just wasted everyone's time. A couple times I had to get one of the latter removed from my team projects since they weren't worth anything.
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I'm not from the US. I've been paying for students for pretty much all my working life, we already have a rather similar system. With the difference that EVERYONE gets to pay for students. Oddly, nobody complains. Why? Because we know that once these students graduate, they'll earn some decent money and pay a metric ton of tax (*sigh* believe me...) which will in turn pay for their pension, their kids' education and so on.
In turn it means that everyone, not just whoever can afford it, but EVERYONE can go and study at a university. Which in turn translates to a lot of students, which again means that universities can afford to simply weed out like crazy. The average field has dropout rates way above 90%. What sounds like very dim students is rather a very brutal selection system. They don't carry your ass around because they need your tuition money. Get organized, get your act together or get the fuck out.
In turn, our universities have a very good rep, nationally and internationally. What comes out of there with a degree is DAMN good. You not only get people who are among the top of their field, they are also experts in organization, information finding (or rather, scrounging), negotiations, project management and a few more things. Or else they'd simply never have graduated.
To answer your questions:
Who pays for the students who go to university and don't graduate?
Who cares if one more person sits in the course? Don't get a seat? Then come in earlier for the next lecture! It's not like you have any right to sleep in.
What happens with perpetual students?
If they can afford it, again, who cares? Either they are lazy bums, then they won't waste space in the lectures because they don't want to get up before 7am. Or they're not then they could as well have a job. Either way, get up early if you want a seat!
What is to stop someone from going to a university until they are one class shy of graduating, moving out of state or even out of the country, and then finishing their degree and never falling under the tax?
What keeps them from finishing and then moving? Nothing. What keeps you from paying back? Well, the "pay back in full if you bail" clause you have to sign if you want your degree.
It kinda helps if your country runs the universities, I have to admit that.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Depends on the position. If we are talking engineers probably not but that may be "just the right kind of out of the box thinking" needed for the standard MBA types.
Oh yes, engineers are just paragons of virtue. I'm reading a whole bunch of engineers posting in this thread about how they would scam the system and you think someone with a business degree is somehow worse? Seriously, I have both engineering and business degrees. Are you claiming that I am a criminal because I went to school to learn how to run a business? Or are you just interested in scapegoating a bunch of people you don't actually know much about because it is convenient and you don't actually understand what they do?
Let me give you a tip. No matter what your job is, people think you are an incompetent idiot in some way and few people will ever really understand what you do. People (wrongly) think engineers are arrogant nerds with limited social skills and bad hygiene who don't understand anything that isn't a machine and who don't understand money at all. People (wrongly) think all finance people are criminals who are only interested in making a quick buck. People (wrongly) think all marketing people are a bunch of impractical imbeciles who don't understand anything technical. People (wrongly) think that people who manage others are incompetent greedy asshole who can't actually do anything useful and who never make correct decisions. In ANY profession you will find some people who are good, a lot of people who are mediocre and some people who are genuinely incompetent. Just because you've run into some of the later doesn't mean everyone is just like them.