Robert Reich (Bill Clinton’s former labor secretary) gave a commentary on public radio’s Market Place this morning, that presents a solution to the growing amount of debt that students take on.
Here is his proposal:
“Any college student can get full funding from the government, with only one string attached. Once they've graduated and are in the work force, they pay 10 percent of their incomes for the first 10 years of full-time work into the same government fund they drew on to finance their college education.”
He also notes that the average graduate has $22,000 in debt. Interestingly this figures is more than 4 years of tuition and fees at Reich’s own institution (California Berkley) and mine Towson University. Many of my students work part time to pay for school. According to this report the average Towson graduate had $16,000 in debt upon graduation.
Towson students on average could pay back their loans in 10 years by paying under $1,500 a year (I don't have the figure, but I hope our graduates make more than 15k a year). Most state governments already offer an affordable alternative to private schools.
Now Reich’s plan implies it is optional, so what would the effects be? When something is subsidized then its final price tends to rise. The price consumer pay is lower than before, but part of the benefit goes to the seller. In short the plan sends money from the government to private universities.
Perhaps increasing funding for public universities would be a better policy to alleviate student debt.