Masking a Targeted Tax as Free STEM Higher Education

Republican candidate for California Governor Neel Kashkari wants to give university studnents free tuition! However, he wants “a new financing program for STEM students where free tuition is provided in exchange for a small interest in their future earnings.” After all, nothing is ever truly free.

Nonetheless, this is a pretty hefty call for a state where two of its leading universities – California State University (CSU) and the University Of California (UC) – saw tuition double in the last seven years. Nor is this phenomena limited to California, as rising tuition costs are making it much more difficult for students to pursue higher education without falling into serious debt.

To combat rising tuition costs, Kashkari wants to reduce the time it takes to earn degrees and certificates, as well as force UC and CSU to focus on online learning. Though he acknowledges that online learning is not a silver bullet solution for the enrolment bottlenecks that inflate tuition; he does mention it is a step in the right direction to make higher education more affordable.

The bottlenecks Kashkari speaks of include minimal lab space, professor availability, student repeats and forced enrolment; issues all reduced by online learning. Therefore, forcing the schools to put 20% of their courses online within four years, as planned, would probably help reduce the bottleneck.

On the whole, though, I’m not convinced of the theory. Though the cost of offering online education is certainly lower, the price asked of students seems comparable, at least according to our own survey of masters of engineering management programs.

Additionally, this does not address the “free tuition” issue. To perform this feat, Kashkari would have to offer a free education upfront and without debt. However, under his current plan students would owe a portion of their earnings to the state as soon as they are employed. A time in which money is tight, and any debt is burdensome.

California is not the first state to propose this idea either. Oregon passed legislation for this model and is working to start a pilot program in 2015. Currently, payment is estimated to be 3% of a person’s salary for 24 years – and that is regardless of whether a student goes on to be a doctor or if they instead choose to “pursue careers with more modest salary expectations.” New Jersey, Ohio and Pennsylvania have also introduced similar models to legislature, while 19 state representatives discussed the model in conference.

The main worry for California is that if too many students “pursue” jobs with modest salaries the program may not be able to sustain itself. To combat this issue, Kashkari hopes to implement it as an optional scholarship program; theoretically taking some of the burden off the system. It would also be logical to have advanced degrees included in the proposal as in theory, they should take in the highest salaries. However, Kashkari’s press secretary Jessica Hsiang Ng comments that “currently the proposal only covers four-year college degrees.”

As for “modest salaries,” I would be more worried about the students that are unable to find employment in their fields and are forced to accept whatever they can get. What guarantees will the state implement to ensure that students are pursuing higher salaries when it’s often just a struggle to survive in a tough economy? How can we be sure this is not just the same trap for our youth rebranded? Will students be forced to work in California paying their dues to the “lord of the manor?”

The bigger question is, isn’t this model just a form of taxation targeting the middle and lower classes who cannot afford the up-front costs? After all, it is safe to say the whole economy would benefit from an increased number of STEM students. Therefore, instead of targeting students at 3% isn’t it best to target the general public at a much more manageable percentage? To ensure the future of our economy isn’t it about time we follow the lead of Sweden, Finland, Austria, Norway and Germany that offer some forms of free (or near free) tuition? And shouldn’t industry, those that look to benefit the most from an increase in STEM graduates, support the change?

Source Neel Kashkari