An Australian (who is currently a grad student in the US) checking in here with a contribution.
Ideally, i would like to see a system whereby the whole university system is funded through taxes, and people don’t have to pay for their education except through a progressive taxation system. As quite a few people on this thread have correctly pointed out, nothing is free. What we are essentially talking about here is changing the payment arrangement, and letting people have their education for no money upfront, on the understanding that this education will allow them to contribute to society, both in the work they do in their chosen field and in terms of taxes.
This was the case for about 16 years in Australia, from 1972 or 1973 through to (i think) 1988. I would be happy to go back to those days, but given that this is unlikely, i think the system that Australia currently has in place is a workable and comparatively equitable one. Here’s how it works:
Firstly, university education in Australia is subsidised by the federal government from tax revenue. Students make up the difference through a system called the Higher Education Contribution Scheme (HECS). HECS splits the university curriculum into three levels, and annual costs to the student are determined by what degree he or she is taking. The degrees that cost more to provide in terms of equipment, staff etc., and which are generally of higher prestige or higher earning potential, cost more than other degrees. The annual costs for each degree are as follows (all figures in $A; $A 1.00 = approx. $US 0.55):
Band 1 $3,598 (Arts, Humanities, Social Studies/Behavioural Sciences, Education, Visual/Performing Arts, Nursing, Justice and Legal Studies)
Band 2 $5,125 (Mathematics, Computing, other Health Sciences, Agriculture/Renewable Resources, Built Environment/Architecture, Sciences, Engineering/Processing, Administration, Business and Economics)
Band 3 $5,999 (Law, Medicine, Medical Science, Dentistry, Dental Services and Veterinary Science)
So, a four-year arts degree will cost you about $A 14,440 (approx. $US 8,000), and a five- or six-year law or medicine degree (these are combined undergrad/grad degrees) will cost about $A 30,000 - 36,000 (approx. $US 16,500 - 20,000).
The best part about the scheme, however, is not the price, but the way in which the money is collected. You don’t have to pay anything up front, and do not have to pay back any tuition costs until you are earning an income. Once your annual income exceeds $A 22,300 a year (a pretty paltry sum), you start paying the government back through the tax system. Each year, a certain amount is added to your tax bill until you have paid back your education fees.
The schedule for paying back HECS debts is as follows:
Annual income
Below $22,924 - Nil repayment
$22,924 to $24,176 - 3 per cent of income
$24,177 to $26,052 - 3.5 per cent of income
$26,053 to $30,220 - 4 percent of income
$30,221 to $36,473 - 4.5 per cent of income
$36,474 to $38,390 - 5 per cent of income
$38,391 to $41,266 - 5.5 per cent of income
$41,267 and above - 6 per cent of income
The debt does not draw interest, but does rise in line with the Consumer Price Index (i.e. with inflation).
There are some benefits that accrue to those with plenty of money. If you choose to pay your HECS fees up-front each year you are at college, you get a 25% discount. And if, after you have graduated, you make any voluntary payments in excess of $500 (on top of your normal repayment schedule) you get a 15% discount on those payments.
I currently have a debt of about $A 10,000 remaining. As i said, i’m in the US at the moment, and if i never return to Australia that debt will be written off. But i intend to return, and when i do i will commence repayments out of my Australian income.
This system allows people with little money to attend university in the knowledge that they do not have to start paying for their education until they graduate and are earning an income.