Such a plan, using government funding up-front and tax agency collection at the back end, raises another possibility that I think has some merit: targeted reductions on loan repayment based on where a person ultimately pays taxes.

For example, I was raised in small midwestern state that spent large amounts trying to fund a really good university. Unfortunately, very large portions of its graduates would quickly leave to find employment in their fields. The state would subsidize "in state" tuition on the theory that it would help development in the state -- but many of those students would turn around and leave the state first thing. Suppose that instead the state offered *everyone* in the nation one flat rate, but then agreed to reduce the payback by a certain percentage out of the state tax returns. If you left the state and earned your living elsewhere you would pay back in full. But if you stayed in state and worked there, helping thereby to develop the state, you would get reductions on your state taxes.

This would encourage people to stay/live/work in the state that was nice enough to provide them with their education. It would serve as a very transparent 'labor subsidy' for employers who wished to provide jobs in-state, and would encourage people to stay and develop roots rather than just jump for the highest paycheck. Naturally there are a lot of details that will come up, but basically I think the idea of funding "in-state" students would be better based on where they actually end up living/working, rather than where they happen to have residence for the year or so before they graduate high school.

Surely that depends on who is subsidizing the upfront payments. Why should the federal government subsidize state funded colleges at the expense of a mobile workforce?

I think much of the argument behind in-state vs out of state tuition is the idea that public universities get a fair amount of state money, and in state students and their parents have contributed to state income taxes. Thus, they "earned" the reduced price prior to getting their education, regardless of where they go afterwards.

fozzy:

Your idea would ork great if, if there were jobs available there for students. In many places those jobs just do not exist . . . for instance Michigan. If the states can not provide the jobs or does not have the jobs, then should students be penalized for not working in state? Maybe states should skew interest decreases for occupation they need within state?

Nice to see you still here.

Exactly what I was going to say.

Since currently it is mostly the states, the plan is workable. That varies by state, of course. Some states value education, and others don't.