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— It should provide educational vouchers (similar to Pell Grants) directly to students (not schools), and make those vouchers progressive (very low-income students receive the most, fairly low-income students a little, and middle- and upper- income children nothing).
— Add performance incentives, rewarding timely degree completion and good performance.
— Remove the tuition tax credit that largely assists relatively affluent students and their families; perhaps use savings from all of the above to reduce the budget deficit.
— Eliminate the Free Application for Federal Student Aid form and require that applicants give the Internal Revenue Service permission to provide family-income data.
My guess is that the total number of students attending four-year programs would fall modestly, a good thing given the disconnect between the labor market and college enrollment; that the proportion of students from lower-income families would probably increase (also good) both because the Free Application for Federal Student Aid form is a barrier for lower-income families, and the burden of aid reductions would fall mainly on the colleges and more affluent students.
Also, the total cost to the federal government would drop significantly.
More radical solutions might involve rolling many government-income security programs into compulsory tax- sheltered 401(k)-like lifetime individual security and investment accounts, allowing withdrawals for college costs. However it is done, the current system needs replacing.
Richard Vedder is director of the Center for College Affordability and Productivity and teaches economics at Ohio University.
The Opinion section is produced by the Editorial Department to foster discussion about key issues. The Editorial Board represents the institutional voice of the Star Tribune and operates independently of the newsroom.