You can bet that if a program like this gains a foothold, the 3 percent-for-everybody piece of it will last maybe five years. After that, those who are already paying a lot more will be told that since they are “more fortunate,” they will have to pay even more.
Backers of the proposal are already speaking admiringly of Australia, which they say has a similar program, except that “bankers” have to pay a higher percentage than “teachers.”
This is another obvious incentive for adverse selection, because anybody with big ambitions will also be smart enough not to get sucked into a deal that would require them to pay five to 10 times or more than the actual cost of their education.
And that leads to another hole – a financial hole for taxpayers. The proposal estimates that it will cost Oregon about $9 billion in “transitional” costs to fund the program until the money from graduates reaches a level to make it self-sustaining. And if it doesn’t work as promised? You know who will be on the hook for that.
The only reassuring element of it all is that the Oregon state Legislature has created a study committee to come up with a pilot program. And in general, a study committee is a good way to delay or outright kill a proposal.
Taylor Armerding is an independent columnist. Contact him at email@example.com