In the second post (and in the comments), I expressed my preference for a 'post-paid' model in which students repay the cost of education through a higher tax on their income. I like it especially because of the insurance component -- if you, somehow, end up with a low income, you are not burdened with a hefty repayment obligation.
This is a government-funded program in Australia, and a variant has just been introduced in the UK.
A couple of recent articles in NYTimes by David Bornstein talk about an essentially similar scheme, but implemented by the private sector:(a) Instead of Student Loans, Investing in Futures, and (b)A Way to Pay for College, With Dividends. Here's an excerpt from (b), where this scheme is given a nice name -- Human Capital Contract:
If you were a student looking for financing to pursue a degree in social science, would you accept an offer of $16,000, in exchange for paying 4.5 percent of your income for 10 years after you graduate?
... In exchange for the financing they receive, the students commit to repayment schemes along the lines of the one outlined above (the terms vary). After the time period elapses — it’s always 10 years or less — the obligation expires, no matter how much has been repaid. [...]
... [H]uman capital contracts are not a new idea. The Nobel-prize winning economist Milton Friedman proposed them in the 1950s. Decades ago, Yale University experimented with a program through which students could postpone tuition and repay it later as a fraction of their income. The idea was abandoned after the introduction of federally subsidized loans. Australia allows students to pay for college through a special tax after they graduate, which operates in a similar fashion. And in 2009, the U.S. government introduced income-based repayment for federal loans, which are available to students whose debt is high relative to their income. What’s common to these programs is that they all try to lessen the financial burden of a college education by shifting from fixed loan obligations to payments that fluctuate based on income.