As we all know, higher education costs are increasing at a rate far in excess of inflation, burdening students with massive debt loads even as the economic value of their degrees becomes more questionable. I propose the following reforms to solve this problem:
- All public colleges and universities must be fully funded using a separate tax stream not subject to the annual appropriations process and must provide a free undergraduate education to all qualified applicants.
- All universities, whether public or private, must spend 85% of their operating budget on instruction.
- All endowments in excess of ten years worth of the institution’s operating budget will be confiscated and pooled into a national endowment to be distributed to less privileged schools.
In essence, this is structurally similar to the “best case” version of Obamacare — a public option to compete against private insurers, plus a mandate that private insurers must devote a certain percentage of their revenues to medical losses. (Insurers have no equivalent to endowments that I can tell, so I had to add that.) I thought about more specific measures, such as banning for-profit colleges or forcing colleges to give up useless expensive football programs, etc., but it seems to me that those problems would go away more or less automatically within this framework.