Oregon's Educational Blunder

Last week, while I was out having fun and railing about the Authoritarian Lessons of Education, a statist education bill in Oregon passed through the legislative assembly. The advocates nicknamed it the "Pay-it-Forward Bill" because it aims to "replace current system of tuition and fees required to attend institution of higher education" (HB 3472), because the tuition fees are getting rather out of control.

I really have to hand it to these government types. They seriously think that the un-affordability of their public universities is comparable to the end of civilization. You don't believe me? Read the bill. They just added a section:

SECTION 4.  { + This 2013 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2013 Act takes effect on its
passage. + }

According to the plan: residents of Oregon graduating high school will be able to prolong their childhood by attending, for free, an Oregon public college or university. But watch out! Any time he government gives something away for free, you know it shows up someplace else: "It's a TAX"!.

Sure enough, they plan to pay for current students by withholding a small percentage of income after graduation. Remember when I claimed that people coming out of a state indoctrination center are unable to imagine voluntary mechanisms? Apparently, I wasn't speaking hyperbole.

The bill’s passage did not result from a multi-year coordinated effort hammered out by elite policymakers. Incredibly, it started just this past fall, with a college senior project at Portland State University. The 6-credit “capstone” course was called “Student Debt: Economics, Policy and Advocacy,” and it sought to combine deep research of the history of student debt with the real-world experience of actively seeking potential remedies. “We wanted to propose a solution to begin to resolve the issue on the state level,” said Ariel Gruver, one of the 15 students. (Oregon Students Fight Back Against Debt, And Win)

Instead of breaking up the bureaucratic monstrosity that has led to higher tuition, these people, students even! want to double down. Graduates from this program contract to pay 3% of their future earnings for 20 years, so that the proceeds can go to pay for a new generation of state captured students. This sounds suspiciously like a scholarship, except that it's not discipline specific, so it doesn't respond to market demands for skills.

And the reporting on this program is full of optimistic nonsense. Let me poke some holes: What if graduates leave the state? what if they leave the country? Does an Oregon program extend to foreign income? What if they majored in something worthless and never pay back in because they can't get a job? or they get a job within the Oregon university system and leech the program for their entire life?

I see no reason why similar contracts, individually negotiated wouldn't achieve similar goals. I mean, my parents were able to secure students loan for their tuition. These loans were not as heavily regulated at the time, so the provider had to worry about default. Because of this concern, STEM majors had an easier time getting loans. Rates followed market demand for skills, discouraging abuse on all sides.

This Oregon plan doesn't have those balances. In fact, people with no understanding of economics think of this deficit as a virtue:

This [pre-tax payroll deduction] creates an incentive to choose a career based on personal fulfillment, rather than one that earns lots of money to pay down student debt. Income-based repayment exists at the federal level, but it’s a higher percentage of income (capped at 10 percent of discretionary income) and it merely pays off individual student loan debt. It does not have Pay It Forward’s element of universality, where everyone pays into the program and attends college tuition-free. (Oregon Students Fight Back Against Debt, And Win)

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.
...
Additionally, because a universal IBR system requires individuals to pay back a percentage of their income, it ensures that graduates that go on to more lucrative careers effectively subsidize graduates that do not. So, it is (in a sense) internally redistributive, which is a positive from an egalitarian perspective. Finally, because repayment is based on income, no one will find themselves overly burdened by the repayment obligation. (Oregon Is Doing Free Higher Education the Right Way)

So it's egalitarian to make others pay? To force the highly skilled that are now to subsidize the mediocre. To allocate costs to society, the same one that you claim to be saving! which now has to pay for the malinvestment in worthless majors! Oh but wait, this plan is approved by politicians, who probably did pick such majors, and journalists, who undoubtedly picked such majors!

Don't do it Oregon! Free (statist) Education is a TAX!