This article was sent on January 17, 2003, to the Letters Editor, Wisconsin State Journal, in response to their leading article. It was published  on February 24.
Arthur S. Lodge     |     home
The Educational Opportunity Bank
To go with a proposed increase in university tuition rates, you suggest an increase in student loans. President Bush wants a 14% increase (to $14.6 billion) in the federal budget for student assistance. Surely it would now be better to set up the Educational Opportunity Bank (EOB) as proposed in 1967 by President Johnson's task force on higher education. The main proposals are as follows:

1. Any US undergraduate could obtain from the EOB funds sufficient to cover all reasonable tuition and living costs up to the first degree.

2. The only means test would be one applied to repayment: if, in any year after graduation, due to illness, unemployment, or for any other reason, a participant has too low a salary (i.e., below a certain "cut-off" level, to be decided), no repayment for that year need be made.

3. Otherwise, for each of 30 to 40 years after graduation, each participant agrees to pay the Fund an amount that depends on the total sum drawn from the Fund and the difference between the participant's salary and the cut-off salary. It is expected that an amount equal to a few percent of this difference would suffice to make the EOB self-sustaining.

This plan has several advantages. It removes financial barriers to undergraduate education and thereby makes it more widely available. It places the funding decision and repayment responsibility where they most properly belong - with the primary beneficiary, the student. Graduates who earn more repay more. Students, freed from all need to earn money while studying, would be able to graduate more quickly. It gives students more freedom in the choice of university, and should, therefore, promote a healthy increase in competition between universities; the more successful might, therefore, be able to expand and open more places.          

                                              Arthur S. Lodge