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Guest Editorial: A new way of paying for college

Sure, it's hard on individuals when changes knock whole industries for a loop. Just ask anyone in the newspaper business, among others.

Still, this "creative destruction" power of capitalism is one of the greatest features of life in America. It's mind-boggling to watch the evolution brought about by innovators such as Henry Ford, Ray Kroc and Steve Jobs.

And here's another attraction: Creative destruction takes place in the world of ideas, too.

One such change may be under way in California, where University of California-Riverside students have developed a proposal that could upend the way Americans pay for college educations.

The Fix UC proposal isn't entirely new. Its basic idea has been written about before, in Forum newspapers and others.

In February, for example, a Grand Forks Herald editorial described "human capital contracts," which offer tuition money to students in return for a percentage of the students' income over a set time.

But the students who developed the California proposal have put that idea into policy form. Under their plan, California colleges would be "free" -- that is, the schools wouldn't charge tuition at all.

Instead, students would pledge to pay back to the system 5 percent of their income for 20 years after graduation.

Paying for college would never be the same:

-As USAToday points out, "not only does the plan shift the time at which payment is expected, but it removes the burden of paying tuition from a variety of stakeholders -- including families and the federal government -- and places it almost entirely on the shoulders of students."

That's true, but note the provision that keeps the burden from becoming intolerable: the 5 percent and 20-year limits. Today, students who graduate heavily in debt but wind up in low-paying jobs are trapped. If they can't make the payments, their debt keeps growing, burdening some Americans all the way to retirement.

In contrast, the UC plan would be a burden for all students, but a crushing burden for none. That's the difference.

-Students with the good luck to be born to rich parents have lot of advantages in America. The UC plan would take away one: Parents no longer would be able to pay tuition in full, a practice that lets rich students graduate debt-free.

Instead, all students would get the same access to college and face the same obligation afterwards, regardless of who their parents are.

-Over the decades (and for better or worse), Americans have proven reluctant to pay for colleges and universities through higher taxes. The UC plan changes that dynamic by securing a revenue stream for higher ed that doesn't depend on tax dollars.

No, it's not perfect, and it's still light-years away from becoming law. But "we think these ideas are constructive," said the president of the University of California System when students presented the idea to the Board of Regents. And when the president of the Associated Students of the University of Oregon heard about the plan, he responded by saying, "A movement like this would be absolutely acceptable. I don't see any reason why we can't see a 'Fix Oregon University System' movement at Oregon."

It's a start.

This editorial represents the opinions of the Grand Forks Herald editorial staff. The Grand Forks Herald is a Forum Communications Co. newspaper.