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Financing College With a Tax On All Graduates

samzenpus posted about 8 months ago | from the time-to-pay dept.

The Almighty Buck 597

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.'"

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Lifers? (5, Interesting)

Anonymous Coward | about 8 months ago | (#46244483)

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.

Re:Lifers? (5, Informative)

Mr. Freeman (933986) | about 8 months ago | (#46244561)

Obviously, there would be a limit on the amount of subsidized education you can get. Did you seriously think that this proposal was as simple as "pay for it with some taxes"? Use some common sense.

Holy cow, a decent idea! (4, Insightful)

Mr. Freeman (933986) | about 8 months ago | (#46244485)

This is actually a really good idea. However, it does need some limits, particularly with regard to tuition prices. This proposal will give universities to raise tuition prices like mad. We need to place some serious restrictions on those.

Re:Holy cow, a decent idea! (5, Insightful)

Albanach (527650) | about 8 months ago | (#46244519)

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.

Re:Holy cow, a decent idea! (1)

Mr. Freeman (933986) | about 8 months ago | (#46244567)

At least it's a step in the right direction.

Re:Holy cow, a decent idea! (0, Insightful)

Anonymous Coward | about 8 months ago | (#46244829)

1. Don't go to college
2. Start a business
3. Employ graduates
4. Don't pay any extra tax yourself
5. Profit

Re:Holy cow, a decent idea! (0)

Anonymous Coward | about 8 months ago | (#46244577)

More important than simply finding a new way to foot the bill, is finding a way to put the tuition cost back under control. Tuition should tail the inflation rate or the median income. This new system would create more crappy colleges, reduce the number of accepted applicants, or create a culture of lifers.

Once the cost is under control, I wouldn't mind an investment from income tax, but I feel that there are other areas that need work before that.

can also lead to more schools to teach real skills (1, Insightful)

Joe_Dragon (2206452) | about 8 months ago | (#46244823)

can also lead to more schools to teach real skills and not years of fluff and filler

Re:Holy cow, a decent idea! (5, Insightful)

jbmartin6 (1232050) | about 8 months ago | (#46244587)

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.

Re:Holy cow, a decent idea! (2)

The123king (2395060) | about 8 months ago | (#46244759)

Here in the UK we have a system of student loans to help finance the cost of university or college. This loan can, and in most circumstances, does cover the university fees, along with rent and living fees. This is great, as we can go to uni without having to pay anything at all up-front. But, seeing as it's a loan, we have to pay it back (at 9% or our earnings (!?!?!)) once we earn more than £21,000.

This loan system allows people from poorer backgrounds to get the same access to education that richer kids get. I'm sure there's a similar system in America, but this one works well here. We don't pay (much) tax towards uni fees, and only people who actually want an education get funding.

Re:Holy cow, a decent idea! (0)

Anonymous Coward | about 8 months ago | (#46244639)

Of course general taxation is the way to do it.

And cover helath care and child care as well.

There is absolutely nothing innovative about this scheme. It is worse than useless since the scandinavian model implemented the improved version 30-40 years ago!

Real innovation would be to actually calculate the probability that a person would earn a lot of money and create a market where insurance corporations could "bet" on the general taxation of an individual. That way, if an individual was "destined" to make a lot of money if he took a certain type of education according to an insurance company, the company could subsidise the education even further and possibly get some payback from the general taxation on that individual.

We need innovation in how to calculate the risk vs potential for an individual, not this idiotic crap that is 40 years too late.

Re:Holy cow, a decent idea! (1)

thegarbz (1787294) | about 8 months ago | (#46244687)

That's not what they are saying. They are accepting that student loans is the way to fund education but are simply taking the money lenders out of the equation and moving it to the government. Australia does the same thing with the HECS-HELP scheme. Students study with no up-front fees, however their studies get recorded against their tax file number. As soon as they start earning more than $51,309 they start taking a percentage to repay what effectively was a government loan.

Our loan by the way is indexed against the CPI but no interest is applied to it.

Re:Holy cow, a decent idea! (2)

mjr167 (2477430) | about 8 months ago | (#46244529)

Naw... just require a vote to raise tuition. We'll vote it down like a raise for teachers.

Re:Holy cow, a decent idea! (1)

Anonymous Coward | about 8 months ago | (#46244605)

No, it's not a good idea, because it decouples the cost from the people who are expected to pay for it. Once you've graduated, you have no influence on the amount of money that goes to paying other people's tuition. Like all public funds, it will be mismanaged, the amount will steadily increase, its effectiveness decline. Besides, the elite colleges will most certainly still demand additional payments, or if that is not allowed, opt out of the system, so this won't open the elite colleges to everybody. Yes, student loans have made college more expensive. This will make it even more expensive.

Re:Holy cow, a decent idea! (2)

DeathToBill (601486) | about 8 months ago | (#46244641)

Lots of other Western countries already have similar systems. Where I studied in Australia, I 'paid' about $5,000 per year to attend University. The government loaned me this money. Once I graduated, any income over a certain threshold was taxed at 1.5% and any income over a further threshold at 3% until the loan was repaid. The loan amount increases with inflation (CPI).

There are two main problems with it: 1 - it penalises disciplines that are productive in the economy. The BA student who either never works or flips burgers at McDonalds gets his education for free, while the engineers or doctors have to pay. 2 - it encourages brain drain. Since the repayment is through the tax system, the easiest way to avoid it while still earning good money is to move to another country where they won't care about it.

Re:Holy cow, a decent idea! (2)

jittles (1613415) | about 8 months ago | (#46244657)

This is actually a really good idea. However, it does need some limits, particularly with regard to tuition prices. This proposal will give universities to raise tuition prices like mad. We need to place some serious restrictions on those.

A decent idea? I don't think so. A decent idea is going to a school you can actually afford. I have no interest in paying for you to go to Embry Riddle or Fullsail college. If you want to drop $100k a year going to Harvard, you can pay for it. I am not going to pay a tax to cover your educational choices. You want to go to that fancy school? You can pay for it. If you can't understand personal finance well enough to understand that you'll be burdened with debt for the rest of your life if you take out a $200,000 loan to become a history major then perhaps you should just go to a vocational school.

Now if you only had to pay that tax until you repaid the amount you spent, plus interest, then that makes a lot more sense to me. But at that point you're basically just talking about a federally backed student loan.

Re:Holy cow, a decent idea! (1)

CastrTroy (595695) | about 8 months ago | (#46244851)

I agree with this. From what I've looked at, most schools in the US are the same price as the schools in Canada, provided you choose to go to a school in your own state. If you choose to go out of state, you start paying close to international student rates, which are quite high. If there are no good schools in your state, then that is something to push on the government. Taxes are fine to pay for schools, but they should be set up to create quality schools in your own state, so you don't have to move across the country to get a good education.

Re:Holy cow, a decent idea! (1)

Nephandus (2953269) | about 8 months ago | (#46244671)

You're not good at math or logic, are you? This is worse than a ponzi scheme. Costs will necessarily rise as population does, even ignoring excesses, making the increasingly relatively smaller graduate population pay increasingly more per capita till you hit and exceed their living income. It's the social security idiocy all over again.

This is an Australian innovation (5, Informative)

purnima (243606) | about 8 months ago | (#46244489)

called HECS.

http://studyassist.gov.au/site... [studyassist.gov.au]

It began in the 1990's and was developed by the economist Bruce Chapman.

https://crawford.anu.edu.au/pe... [anu.edu.au]

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.

Re:This is an Australian innovation (1)

thegarbz (1787294) | about 8 months ago | (#46244581)

This scheme works a treat making it cost free to attend universities however there are some ways it gets abused. If you can avoid paying income tax in Australia then you can avoid paying back the HECS fees. The classic way of doing it is by emigrating to the UK once University is finished. The government has no recourse to reclaim unpaid HECS. Currently the government has a $23bn HECS deficit because of these practices.

Another form of abuse led to meeting some interesting folks during my time at Uni. Specifically a 92 year old who was studying a degree in advanced mathematics. We got talking one day and I asked him what he was doing here. Basically he was bored in retirement and decided he wanted to get a degree in maths. Given he'd never work from this point forward, and if he did he'd be under the HECS repayment threshold he was effectively studying for free. A few of my friend's parents also have this retirement plan.

Re:This is an Australian innovation (2)

rvw (755107) | about 8 months ago | (#46244699)

If you can avoid paying income tax in Australia then you can avoid paying back the HECS fees. The classic way of doing it is by emigrating to the UK once University is finished.

Seriously?! The classic way? If I can rob a bank for $25m and can get away to the UK without having to pay the "tax", I would do it, but fleeing the country for 3% extra tax sounds absurd.

And for those few 90+ students you can set an age limit, or a limit on the number of years. Or you can set an increasing onetime tax for each college year after 40.

Re:This is an Australian innovation (1)

thegarbz (1787294) | about 8 months ago | (#46244739)

Yes seriously that's the "classic" way of doing it. It may be a few percent but it still amounts to some $20k - $50k depending on the degree. The fact is that there are many people who right now have an idea in their head of not staying in the country in which they grew up. My sister is a classic case. She's wanted to live in Paris since I can remember. Well she got her degree and left. She didn't flee because of 5% tax, that was just an extra sweetener in the deal.

Re:This is an Australian innovation (0)

Anonymous Coward | about 8 months ago | (#46244765)

If you can avoid paying income tax in Australia then you can avoid paying back the HECS fees.

This is not an issue in the US as the US is the only country in the world that demands it's citizens who live overseas pay US taxes on income derived in another country. This makes working abroad for regular US citizens very difficult. The majority of Americans who work abroad tend to be on very good incomes ( because they will have double taxation), or have ways to hide their foreign income from the US government. In such cases the US government responds with political pressure [reuters.com] on the non-obliging countries.

I find the US double taxation on expats quite unfair.
(BTW I am not a US citizen but I am an expat.)

Re:This is an Australian innovation (0)

Anonymous Coward | about 8 months ago | (#46244603)

WTF? This is the scandinavian model, and is far older than the 90's.

The exact same argument is made for health-care, education and child care.

It is a risk reduction technique, an insurance if you will.

Invented in the 90's? Pffft.

Re:This is an Australian innovation (0)

Anonymous Coward | about 8 months ago | (#46244757)

I don't see any links or evidence to your challenge.

Does the Swedish system work the same as HECS or PELS? If so, why not link to the explanation of them or a Wikipedia article?

At least allow the old system as an option (1)

Anonymous Coward | about 8 months ago | (#46244675)

It sounds like it works well, but I still want to be able to pay up front if I'm able. My parents (who are really on the far lower end of the income bracket) put a lot of money into my education fund and, with the help of scholarships, I managed to make it through school with zero debts. I'm fine with a system like this as it's proposed, but only if it's not a requirement. I should still be able to pay what I have available up front if I wish.

Re:At least allow the old system as an option (0)

Anonymous Coward | about 8 months ago | (#46244825)

In Australia you can pay up front to the universities if you want to. In fact it is cheaper in the long run if you can pay up front (most people can't).
You don't have to go on HECS if you can afford it.

Re:This is an Australian innovation (1)

jbmartin6 (1232050) | about 8 months ago | (#46244799)

Perhaps I am misunderstanding, but this does not look to me to be the same thing at all. The proposal in the article is that ALL students would qualify, and ALL graduates would be required to pay. The HELP scheme, it looks to me, is only for students who qualify, and only students who participated are required to pay back.

Same problem as our economy (0)

Anonymous Coward | about 8 months ago | (#46244491)

Ir requires continuous growth in order to maintain viability.

Open the floodgates (1)

Anonymous Coward | about 8 months ago | (#46244493)

And because more money is made available, colleges can continue to inflate prices unchecked by normal market controls.

What a shocker (0)

Anonymous Coward | about 8 months ago | (#46244501)

People who make money should spend money to help improve the economy and decrease costs for everyone?

It must be criminalized.

wimpy (0)

Anonymous Coward | about 8 months ago | (#46244503)

I will gladly pay you Tuesday for a hamburger today.

NEVER (-1)

Anonymous Coward | about 8 months ago | (#46244511)

Never going to happen...

Mmmm (0)

Anonymous Coward | about 8 months ago | (#46244515)

Can someone tell me how is that different from how primary, middle and high school work?

While debt sucks, it's gives a sense of.... (1, Interesting)

Anonymous Coward | about 8 months ago | (#46244517)

While debt sucks, it's gives a sense of RESPONSIBILITY and MOTIVATION TO SUCCEED.

If you know you are paying for college or at least going to have to pay back some of the cost, you tend to be more motivated to at least pass your classes.
Everyone I knew that got complete a free ride from grants did not feel motivated enough to pass their classes. What did it matter to them? It didn't cost them anything out of their pockets.

Re:While debt sucks, it's gives a sense of.... (2, Insightful)

Anonymous Coward | about 8 months ago | (#46244643)

MOTIVATION TO SUCCEED.

So does a death penalty for being unemployed.

So what will end up happening is the states that (4, Insightful)

portforward (313061) | about 8 months ago | (#46244527)

implement this will be very popular with college students and then everyone will move to the "traditionally funded college" state schools to avoid the tax. Also the STEM, medical and business students will end up subsidizing the fine art, journalism and french medieval poetry students and their professors. This already happens to a degree (no pun intended), but at least the penalty is more born by the student through loans that need to be repaid, rather than the people who studied a more rigorous and practical career. Also, we will probably end up with too many people who go through law school because there is really no penalty to attend (besides lost wages) and then they won't be able to find jobs and then become something else.

Re:So what will end up happening is the states tha (2)

thegarbz (1787294) | about 8 months ago | (#46244591)

This happens in Australia. Even with a country wide tax there's nothing stopping someone from emigrating after studying is finished and thus never repaying the student loan.

Seriously? (1)

Anonymous Coward | about 8 months ago | (#46244541)

This is a new idea? This is what progressive countries already do. University is free and you pay higher taxes later. Duh!

Problem (-1)

Anonymous Coward | about 8 months ago | (#46244543)

The first problem is that if college was free to attend the number of people attending would skyrocket making college graduation worth less than it already is. The second problem is during the first years of this the college graduates that paid their own way through working 80 hour a week jobs, getting internships, and taking out loans would be paying for someone to go for free.

Perfect! (0)

Anonymous Coward | about 8 months ago | (#46244545)

So we'll take the current generation of grads crippled by student loan debt and cripple them with the next generatoins debt as well!

Some issues I see (2)

thaylin (555395) | about 8 months ago | (#46244547)

1. People who go to college and graduate, only to become stay at home dads/moms would be a burden on the system.. Easy to fix for marriages, but harder for the unmarried.

2. People who dont graduate/stay in school forever.

3. Dwindling population, in general, or just of graduates, will destroy the system.

And that is just at a quick thought.

Re:Some issues I see (0)

Anonymous Coward | about 8 months ago | (#46244607)

What he just described is essentially Social Security. The current working population finances the current retiring/retired population. We all know SS does not work well, and we are seeing the issues right now.

Re:Some issues I see (1)

thaylin (555395) | about 8 months ago | (#46244731)

SS works fine as long as you dont have a surge in population (ww2) and corrupt politicians pulling from it.. To be honest if done properly it can survive the first, nothing can survive the second.

I'm not sure Free is the way to go (1)

rmdingler (1955220) | about 8 months ago | (#46244673)

The sad truth is that higher education is not necessary for most people.

Removing the bar of it costs something will effectively open the schools up to a flood of freeloaders who will never graduate to repay the system.

No person who is willing to work for it should be denied a collegiate opportunity... and I doubt very many who are willing are denied it.

Re:I'm not sure Free is the way to go (1)

thegarbz (1787294) | about 8 months ago | (#46244713)

So limit the number of entries and then select them according to GPA.

College admission should depend on how smart you are, not how wealthy.

Re:I'm not sure Free is the way to go (1)

rmdingler (1955220) | about 8 months ago | (#46244793)

Some form of merit could be used, perhaps, but wouldn't you say GPA is a bit subjective from high school to high school?

A cousin of mine never got below an A in any class except physical education, which was basically a required C all four years she attended.

It removes all barrier to entry (1)

codemaster2b (901536) | about 8 months ago | (#46244553)

I have to point out that this is program would remove all barrier to college entry. If there is no cost to start education, and not finish it, then there will be millions of people who do so. Think of the problem we have now of so many students not knowing what they want out of life just joining college. I do agree that the current system of student loans is badly broken. I have many friends who bear an unreasonable level of debt.

Re:It removes all barrier to entry (1)

thegarbz (1787294) | about 8 months ago | (#46244631)

Numbers remain a barrier for entry. I'm not sure how the system works in the USA but in Australia where we have exactly this kind of tax funded student "loan" they are proposing universities limit the entries for each degree. When people sign up they put down their preferences for which uni to attend and the universities start at the top of the pecking order (best grades) and work their way down till their quota is finished.

At the end of the year they publish a book with a list of every university and every degree, and what the cut-off grade was for that year so next year's crop of brain-dead idiots don't think they can simply get into law school if they are barely passing as it is. It does lead to some interesting situations though as when I went through uni engineering was not very popular, so the cut-off grade was almost a failing grade at school. This also lead to an incredibly high drop-out rate in our class as people who could barely spell quadratic equation suddenly had to figure out how to graph it.

Re:It removes all barrier to entry (0)

Anonymous Coward | about 8 months ago | (#46244679)

This is false. To remove all barriers to entry one would have to subsidize all living expenses AND the alternative cost of not getting paid in a real job.

But don't take my word for it, just look at all the countries in the world where higher education is free. There are lots and lots of those and they all disprove your "theory".

The barriers are still there (1)

sjbe (173966) | about 8 months ago | (#46244701)

I have to point out that this is program would remove all barrier to college entry.

You mean except for admissions tests, high school grades, admissions committees, and limited budgets? Just because someone else is paying up front doesn't mean that Harvard is going to let you in. Even big state schools like University of Michigan or University of Virginia have relatively high admissions standards and money doesn't really need to play a role in those. Either you're good enough to get in or you aren't. Nothing wrong with community college or trade schools if those are a better fit for someone.

If there is no cost to start education, and not finish it, then there will be millions of people who do so.

There already are millions who start and don't finish. That's nothing new. Furthermore even if someone doesn't get a degree, there is still probably some value in the education they received. Obviously there would have to be admissions standards and performance standards (minimum GPA, graduate within 4 years, etc) to continue to receive this up front subsidy.

I think the bigger question is how universities would reorganize themselves due to the new financial structure. Right now they have a certain funding model and a structure that flows out of that. Change the funding model and there will be unintended consequences in how universities organize themselves and provide education. The downstream consequences could be very, ummm... interesting.

Re:It removes all barrier to entry (1)

bsolar (1176767) | about 8 months ago | (#46244723)

Make graduating accordingly hard so that only the best graduate and only the expected number. This way the barrier of entry is not based on wealth but based on merit.

brilliant! (0)

stenvar (2789879) | about 8 months ago | (#46244555)

<sarcasm>That's a totally brilliant idea! That way, successful people are penalized for going to college, while slackers get a college education for free and then have to pay almost nothing back. What could possibly go wrong?</sarcasm>

I sort of like it, however: it would drive anybody with half a brain to avoid college and universities like the plague and instead go for unaccredited schools and vocational training. That is, it would motivate people to avoid the stamp of a college degree (since that costs a huge amount of money) and instead focus on actually learning something.

Re:brilliant! (1)

thegarbz (1787294) | about 8 months ago | (#46244661)

I don't follow your logic. What has lowering the barriers to entry have to do with suddenly not wanting to go to university? It's not like the grades or the prestige changes. It just takes money out of the equation for studying, and why should a medical degree be reserved for the rich rather than for the intelligent?

Subsidizing slackers (1)

sjbe (173966) | about 8 months ago | (#46244719)

That's a totally brilliant idea! That way, successful people are penalized for going to college, while slackers get a college education for free and then have to pay almost nothing back. What could possibly go wrong?

That basically happens now. I realize you are being sarcastic but the successful motivated people pretty much always end up subsidizing those who are less able and/or motivated. The only question is how.

One wrinkle with this notion (1)

Ygorl (688307) | about 8 months ago | (#46244559)

...whose principles actually seem pretty good to me. But I can imagine that people would start not-quite-graduating from college. Employers would realize that 7/8 of a college degree is almost as valuable as 8/8, and make accommodations for it. Of course there are ways around this (tax based on the number of classes you took?), but it detracts from the notion's superficial elegance. The ways around this could probably also be gamed.

Because it worked so well.... (0)

Anonymous Coward | about 8 months ago | (#46244569)

...when they did it with retirement savings. Sorry, but Social Security is NOT the model I want to be emulating.

This works amazingly in theory. In practice, once you have a legislature with agendas to push and axes to grind getting into this, it will turn into a pigs breakfast really fast. Maybe they put "tax breaks" in for certain professions they want to value. Maybe they want to offer credits for participating in certain programs. Every decision might seem like a good one, but it doesn't take long and the CashIn starts bearing no relation to the CashOut at the end, and the program becomes yet another political football to kick around.

Students won't know if their tax rate will rise or fall (and so how much college will cost). Colleges will have massive crunches when students switch majors into a suddenly subsidized department (and I assure you it WILL happen), and shortages of professors in key areas will lead to compromising education. Political decisions made arbitrarily will make planning for students and departments a nightmare. Government will put caps on how much they're willing to pay for certain courses/majors, leading major universities to opt out or go "tax funded PLUS" requiring additional expenses.

Look, I love the idea. I love not making college grads with no jobs have to start paying out huge loans. I love moving away from debt financing. But much as the idea appeals in theory, look at ANY major government benefit (at least in the US) and tell me that I'm off-base in my fears of what it will become.

The only flaw in the idea is... Maths! (1)

Anonymous Coward | about 8 months ago | (#46244585)

The assumption is that most graduates get a job.

If the amount tax generated is less than what is required to support the number of people being educated, the system in unsupportable.
For example if 10 people graduate and only one gets a job which pays 100000, then only 3 percent (3000) is avaiable to educate the next 10.
I don't think 3000 per year is enough to educate 10 people.

When there is less jobs more people go into re-education.

Re:The only flaw in the idea is... Maths! (0)

Anonymous Coward | about 8 months ago | (#46244629)

^^ Oh dammit.. so many typos.. I am normally a drunken master on the keyboard, I must be just drunk.

Government is not a fee for service business (0)

Anonymous Coward | about 8 months ago | (#46244589)

Education even at the college level should be paid for by general taxes. Why fool around with half measures?

Universities are a cult (0)

Anonymous Coward | about 8 months ago | (#46244593)

And like all cults, they convince their members of the ultimate importance of the cult over everything, including reason. Maybe we simply don't need such a massive amount of watered-down "education" for most jobs? But then, how do you keep the economy going?

Why do you need to go to university? Because your boss did? Used to be university was for professions, now my trainer at the gym has a bachelor's degree in kinesiology to help fat old ladies get on a treadmill? At best, that's a 2 year college technical program. But I guess you can get more government loans when lifting a metal plate now requires deep knowledge of muscle cells.

What's next? A pulp and paper engineering degree to sell printer paper at Staples?

Questions. (0)

DaveV1.0 (203135) | about 8 months ago | (#46244595)

Who pays for the four to six years of the first crop of graduates? Remember, this suggestion means universities lose the tuition from that first crop and it must be made up somewhere or the universities can't pay their bills. And, if you say "The government", which translate into people like me, I say "Fuck you".

Who pays for the students who go to university and don't graduate?

What happens with perpetual students? You know, the people who have been in school for the last ten to twenty years and haven't received a degree. What happens with them?

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?

Re:Questions. (5, Interesting)

Opportunist (166417) | about 8 months ago | (#46244779)

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.

Answers (1)

sjbe (173966) | about 8 months ago | (#46244809)

Who pays for the students who go to university and don't graduate?

How about those students. If they drop out due to bad grades or other non-hardship reasons then tax those students for costs incurred.

What happens with perpetual students? You know, the people who have been in school for the last ten to twenty years and haven't received a degree. What happens with them?

Easy. You get subsidized for 4 years (or 2 if for grad school) and then after that you start incurring debt if you need longer to graduate similar to how things happen now.

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?

Probably not much but there are ways to mitigate the problem. First thing is that you incur the tax based on time enrolled, not degrees achieved. Second is that you make it like a contract with any other creditor. You don't pay it back and you get your wages garnished. Third, you provide incentives to keep them from leaving the state like waiving a portion of the cost if they remain local and economically productive for some number of years. Fourth, you can require a co-signer like a parent who is responsible for the cost if the student decides to flee the country. Etc. There are lots of ways to mitigate this problem.

Re:Questions. (0)

Anonymous Coward | about 8 months ago | (#46244819)

> What happens with perpetual students? You know, the people who have been in school for the last ten to twenty years and haven't received a degree. What happens with them?

Since almost everyone seems to see this as a top issue: They just don't f-ing matter!
Yes there will be a few people that will try to profit off the system. If you stop wanting to lay landmines because someone might steal an apple from your tree you might be able to make sane decisions, this "I'd rather blow up the whole world than let someone get something for free" attitude is seriously insane.

Get Government OUT of Edukation (2)

Lawrence_Bird (67278) | about 8 months ago | (#46244609)

For fifty to sixty years now government on all levels, Feds in particular have tried over and over to "fix" education. And what has happened every single time? It has gotten worse and/or more expensive. GET THE FUCK OUT OF EDUCATION. That this suggestion comes from a nominal business magazine like Forbes is even more abhorent (Malcomn Sr must be rolling in his grave).

Re:Get Government OUT of Edukation (1, Insightful)

Opportunist (166417) | about 8 months ago | (#46244627)

Please explain why the most successful countries when it comes to education and international comparison tests have "socialized" education systems.

Education and your chance to it must depend on what's in your brain, not what's in your wallet!

Re:Get Government OUT of Edukation (1)

Dcnjoe60 (682885) | about 8 months ago | (#46244777)

Please explain why the most successful countries when it comes to education and international comparison tests have "socialized" education systems.

Education and your chance to it must depend on what's in your brain, not what's in your wallet!

The problem is that it takes more than what's in your brain. Even the brightest child, will not do well later in education if they don't have the basics available. Likewise, an average child, given the right upbringing will succeed quite well. It's not all nature, nurture has a lot to do with it, too.

The idea itself is great, but ... (2)

Opportunist (166417) | about 8 months ago | (#46244613)

But what about those that already went through college and are now paying off their loan? Do they get to pay off twice or what?

Social Security for College? (0)

Anonymous Coward | about 8 months ago | (#46244617)

That will end up just like social security. where fewer graduates will end up paying for more graduates for many years. Then you will have many graduates paying few graduates. Then few graduates paying more to fund a newly increasing group of students. Not a cycle I want for my children. Not to mention paying for a lifetime if you drop out and work minimum wage.

Debt (0)

Anonymous Coward | about 8 months ago | (#46244623)

That just creates debts.

It's just like Pay as you go pensions.

Now I've crunched the numbers for the UK. For a median wage earner in the UK, 26K GBP a year, the state pays 5.7K in retirement. That costs 150K to supply.

If however they had invested their contributions, they would have had a fund of 836K, paying an income of 28L a year and still not touching the capital.

Any scheme like this pay it forward just creates debts, and are incredibly bad value.

Poor Logic (0)

Anonymous Coward | about 8 months ago | (#46244625)

An educated population advances national security and economic interests and is know to be a reasonable burden distributed amongst all tax payers as it is to the collective benefit. The real problem is that the government provided an large pool of money that the schools are drinking and inflating costs as they grow on the pork, secondarily the privatization of loans so banks make obscene profits and do not have to disclose the actual costs of the loan to the borrower with reduced portion of federal loans at more reasonable rates. Add to the mix that your representatives in Washington no longer serve the electorate and will not respond when you inform them of your concerns and only the elites can afford decent schooling and it starts to look like an irresolvable massive social failure. Until we rise up and reject the status quo through collective action conservative and liberal) we will continue to get shafted (I assume most slash dotters have some higher education)

Thats the current system (0)

Anonymous Coward | about 8 months ago | (#46244653)

That's how the current system is supposed to work (and does work in europe). When you earn more money because the government paid your education you have to pay a higher tax percentage.

Sadly US politics are massively influenced by big companies causing them to pay a low percentage as they earn more, which is totally crazy. Sadly european countries are also part of the problem that allows big companies to pay almost no taxes.

meh (0)

Anonymous Coward | about 8 months ago | (#46244659)

Step 1 - Going to college for free.
Step 2 - Don't have to pay later either 'cuz I graduated in arts/women studies/other useless stuff and won't ever have a job.

What work? (1)

Wiener (36657) | about 8 months ago | (#46244663)

While I agree something needs to happen in order to keep skyrocketing tuition under control, I do have a couple comments that struck me immediately about this particular idea:
  1. 1. This is just another ponzi scheme predicated on the economy continually growing
  2. 2. Specific to STEM degrees (?) - how will you force US employers to hire these new graduates instead of H1Bs/offshoring in order to pay the tax to keep a system destined to fail alive as long as possible?

This already exists (2)

wisnoskij (1206448) | about 8 months ago | (#46244669)

It is called income tax. If your college stay helped increase your income, you should already be paying more taxes.
Unfortunately, this tax is currently quite broken for the rich.

This system is far far better than extra taxes for college graduates. Most college graduates did not go to college to make more money, so they cannot afford to pay extra taxes on their income which is already lower than their peers who did not go to college.

I lot of people go to college to get art degrees. And I do not see adding an extra tax on millions of minimum wage workers.

Bullshit! (4, Interesting)

stevegee58 (1179505) | about 8 months ago | (#46244685)

How about the federal government and higher education address the root causes that contributed to a 1000% increase in tuition and fees since 1980?
Low cost federally subsidized student loans are a major part of this problem. It's bad enough that this is a huge overstepping of federal authority. The availablility of billions of dollars of cheap money has fueled the fire of educational hyperinflation. Take away the cheap money - tuitions go down.
Maybe more people in Congress should go take EC101 again (for the first time).

Richer (3, Insightful)

Luthair (847766) | about 8 months ago | (#46244691)

The summary describes why this isn't necessary - college graduates make more money. This means they already pay more taxes.

Yes, let's put the gov't deeper into our pockets! (3, Insightful)

PseudoCoder (1642383) | about 8 months ago | (#46244703)

Eventually they'll find something soft and squeeze and then they'll own me. That's terrific! Let's also further minimize risk, so I have no idea what is wise and what isn't. This way I get to make others pay for my prospect-less liberal arts degree. That's so nice of them! Now everybody will get into college, even the less scholarly types who would be better off in trade schools, and graduation rates will plummet, and this new super efficient government program will be paying for those who flunk out and will exempt them from paying anything since they didn't graduate because the over achievers oppressed them somehow and they are the ones who should pay for drop-outs anyways. That's so sustainable!

We should make everything "communal"! Just like they did in that union that isn't there anymore. Or that other country that's still there imprisoning its dissenters and running them over with tanks. I love my Brave New World!

I call bullshit (3, Interesting)

XB-70 (812342) | about 8 months ago | (#46244707)

The biggest issue surrounding higher education is the lack of oversight of university administration over-spending.

There is also an enormous trend toward creating universities in towns and cities that are suffering economic collapse just for the sake of optics.

No one is looking at employment outcomes nor are they looking at job trends. Putting a tax on the lucky few employed graduates to subsidize fat-cat administrators, university contractors and their ilk does nothing to help the ones who need it most, the students.

Stop this lunacy before it starts.

Re:I call bullshit (0)

Anonymous Coward | about 8 months ago | (#46244821)

scary that this comment is at the bottom of the list!

Who cuts the barber's hair? (1)

whizbang77045 (1342005) | about 8 months ago | (#46244709)

And who pays (and how?) for the initial students who will later pay the tax?

Bias? (0)

Anonymous Coward | about 8 months ago | (#46244711)

Is it just me, or does the statement

"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."

stinks like confirmation bias and reeks of circular logic, given the *current* status quo?

How about no tution at all? (4, Insightful)

Qbertino (265505) | about 8 months ago | (#46244715)

How about no tution at all? It works great for Germany. ... Just sayin' ...

(Cue "Nanny State!", "OMG SOCIALIZM!!", "Obviously won't work because of reasons a,b,c and d", etc. remarks below, thank you.)

Allthough we do have Semestergeühren. Something like 150€ per Semster (GASP!) of enrollment fees. ... This is outrage! I'm going to protest tomorrow. ... Oh, wait, you get the public transport flatrate for that ... and student benefits (cheaper access to public events, etc.) ... Scratch that, I guess I won't protest after all.

Seriously, you guys should move out of the middle ages allready. Healthcare, tution-free college and metric system. It works. Get with the programm. :-)

My 2 cents.

Re:How about no tution at all? (1)

Qbertino (265505) | about 8 months ago | (#46244737)

Whoops. It's "Semestergebühren", with a 'b'. Sorry.

Reward good grades and finishing college (1)

Anonymous Coward | about 8 months ago | (#46244755)

I think more emphasis should be placed on giving tax breaks to those who finish college with good standing and obtaining a degree in areas America needs people.
We have far too many getting worthless business degree's who won't find good jobs. Students should focus on education and degree's that are in demand. Not those that are not worth the paper printed on.

So, would this tax apply to those it did not help? (1)

Attila Dimedici (1036002) | about 8 months ago | (#46244767)

So, the question is, how would this work? Would it go into effect and only those graduates who got a free education would be subject to the tax? Or would the tax apply to all college graduates, even those who graduated before it started (and thus had to take on a large student debt)?
Either way, I don't think it is a good idea, but others have touched on the reasons so I will not go into that.

A better idea (0)

JenovaSynthesis (528503) | about 8 months ago | (#46244771)

How about we just fund it with a sales tax on Wall Street? Because in our current situation graduates are not getting the jobs they once were. Corporations have been totally relieved of all incentives to actually create jobs to hire them.

And while this idea might work in the future, it does nothing to solve the huge $1,200,000,000,000 bubble that is starting to burst.

Get the government (2)

skipkent (1510) | about 8 months ago | (#46244775)

Get the government out of the loan business and prices will drop like a rock.

How about we do this instead? (1)

Anonymous Coward | about 8 months ago | (#46244783)

How about we do this instead?

Students who merit having their college education paid for can get a scholarship, and students who don't merit having their college education paid for can pay out of pocket.

Why should the dumb ass who graduated HS with a 5th grade reading level due to being a pothead slacker have the same investment by society as the student who applied themselves in HS and worked their ass off for good grades?

Easy (3, Interesting)

danbob999 (2490674) | about 8 months ago | (#46244787)

1. Attend college in Oregon 2. Move to another state/country 3. Profit Since it's a tax, and not a debt, you don't legally owe anything back and you are free to move elsewhere.

Problem: not loans, it's profit-seeking schools (3, Interesting)

ReallyEvilCanine (991886) | about 8 months ago | (#46244791)

Even if institutions are non-profit or not-for-profit, cost have been running amok. Schools are paying outrageous sums to executive staff (but -- surprise, surprise -- not to teachers) and spending money hand-over-fist on projects and buildings and anything else they can think of. As long as this spending remains unchecked the best financing plans in the world can't and won't fix the situation.

Do not want. (0)

Anonymous Coward | about 8 months ago | (#46244795)

Let me analyze the logical form of this argument:
1. Current college students who attended public school already received their existing education for free, paid by taxes.
2. Many students who have benefited from a tax-funded public education system to this point are entering college academically under-prepared (and we should send more of them).
3. They are required to pay tuition for remedial courses that do not count toward their degree in order to pass basic math and science courses that are part of the general education requirements for their degree but not directly applicable to their liberal arts or other non-STEM major.
4. They are taking on high student loan debt and are not able to figure out the math to otherwise finance their college education without doing so (see premises 2 and 3).
5. We've already likely created an education bubble by flooding the market with under-educated students, long-term, easily acquired financing protected from bankruptcy, thus inflating tuition costs.
5. Supporters of this plan conclude that we should extend the public education model to the college-level.

I think I may be missing how the conclusion in 5 follows from the first 4 premises. Oh wait, I've got it, assuming the premises are true: 1 & 2 & 3 & 4 = 5 which must be true. Huzzah! GED FTW! I don't need no fancy college degree!

Lower the interest rates (0)

Anonymous Coward | about 8 months ago | (#46244797)

While I applaud the idea longer-term, in the short-term I would argue instead we need to lower the current interest rates on student loans that are set by Congress.

- Undergraduate student loans: Currently at 0.1% interest rate
- Graduate student loans: Currently at 6.375% interest rate

Why the difference? The interest rates on a loan are based on the time period which the loan originated. Congress set the rates during those time periods and loan providers are NOT allowed to change/lower them. My spouse and I both have excellent credit, high income, and banks/creditors would love to refinance our graduate loans at a lower rate ... if they were allowed to.

The most common advice in this case? Take out a home equity loan at a lower interest rate (for which banks can compete for rates to offer) and pay off your student loans with the home equity loan. Ridiculous.

Get a Job (0)

Anonymous Coward | about 8 months ago | (#46244803)

Would work great.. But they forgot one thing. Many grads do not find employment. And when they do its at starbucks. 3% of Minimum wage isn't much.

This is a terrible idea - here are modifications (1)

dan_in_dublin (833271) | about 8 months ago | (#46244811)

This is a terrible idea as stated, students need to have some skin in the game - otherwise they'll study pointless subjects such as arts and fail after 1 year

Some modifications

  • students have to pay at least some non-neglible amount of money to prove they're committed to giving their best effort
  • students need to pass a difficult entry exam / other to ensure they're capable of graduating
  • important subjects for economic development are subsidised to extent that makes economic sense (so e.g. if the country needs 5000 engineers a year, then 5000 engineering places are funded).
  • other subjects are subsidised in light of other goals (e.g. 100 funded arts places per year)
  • social funding for disadvantaged students remains a seperate program
  • if a student doesnt make a subsidised place he pays his own way or does somewhere else with his life
  • money to pay for above comes from grad tax, general tax, it's all good

Military funds (0)

Anonymous Coward | about 8 months ago | (#46244817)

Or they could maybe stop spending so much on Military and 3 letter agencies and use that money to educate their youth instead.

IRS in charge (1)

Anonymous Coward | about 8 months ago | (#46244863)

Do you REALLY want the IRS in charge of college funding? We have public school through HS. It has a load of failures, should it be expanded even more?
What you will get is higher taxes, and a greater separation between public and private schools. Do you want to hire someone whose ONLY qualification is a HS diploma from a public school? How about if they spent another 6 years there?
Will the IRS be able to tell someone that they do not qualify for college? How will that be decided?

Scholarships? (0)

Anonymous Coward | about 8 months ago | (#46244865)

This punishes the gifted and the hard working. I am both, and worked diligently for many years to earn a scholarship to college. I got my undergraduate degree for free. This system punishes those like me and would dissuade the hard work to earn a scholarship since you'll be taxed to hell and back no matter what. Once again, no child left behind... No child allowed to excel. Stop this stupid crap.

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