Policy Shop: Oregon Is Doing Free Higher Education the Right Way

New post at Policy Shop. Excerpt:

So Oregon is basically toying with implementing a universal income-based repayment (IBR) scheme, something I have been (probably excessively) advocating on behalf of for over a year. The idea is simple: make college free at the point of delivery, but impose what amounts to an income surcharge tax on college attendees after they leave.


For the most part, those howling about student debt have rather uncreatively focused on publicly funding higher education through general revenues. This is a system some states have had in the past, but it was not a good system then, and it is not a good system now. The problem with financing higher education in that way is that it is deeply unfair to those who do not attend college. Those who attend college come from disproportionately affluent backgrounds, and have disproportionately affluent futures. Funding college through general revenues therefore represents, at least in part, a transfer from the relatively poor people who do not attend college to the relatively rich people who do. This is especially true when we are talking about higher education funding done on the state level because, unlike federal taxes, state and local taxes are regressive, i.e. poorer people pay higher tax rates than richer people.

Read the rest at Policy Shop.