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In his State of the Union speech President Obama called for universities to restrain the growing cost of tuition. Even in this time of low inflation, the cost of an education at a public college or university has gone up. Politicians haven't been able to do much about it. Now, a group at the University of California has advanced a modest proposal. NPR's Larry Abramson reports that senior administrators are even wiling to consider it.

LARRY ABRAMSON, BYLINE: Chris LoCascio, a junior at UC Riverside, feared there was no end in sight for tuition increases at the University of California. The state kept cutting subsidies, students kept protesting, but no one had any answers. So he and other students decided to turn the discussion on its head. What if...

CHRIS LOCASCIO: Instead of charging students up front for their education, students would attend UC with no upfront costs whatsoever.

ABRAMSON: Under the Fix UC proposal, the bill would not come due until students graduate and start making money.

LOCASCIO: Under our proposal, students would pay 5 percent of their income for 20 years.

ABRAMSON: Fix UC recently presented this idea to the university regents. The idea is that students would have a dependable bill to pay, rather than wrestling with unpredictable tuition increases and rising debt. It's an appealing idea, but not a brand new one. Bob Shireman, who works for the organization California Competes, says conservative economist Milton Friedman wrote about similar concepts in the 1950s, saying education should be seen as an investment.

BOB SHIREMAN: In fact, he suggested the government should provide people with money for college and then charge them a percentage of their income later.

ABRAMSON: Shireman points out that New Zealand, Australia and the U.K. have all invested in variations on this theme. But the UC proposal faces a number of questions. It kind of works like Social Security: the earnings of graduates cover the tuition costs of the next generation.

Bob Shireman asks what if there's a baby boom, or if UC grads simply don't earn enough money to cover the university's operating costs?

SHIREMAN: If, over time, it was not bringing back in the money to repay, the investors would then rethink and the deal would have to be renegotiated.

ABRAMSON: The guy whose opinion really matters is Mark Yudof, president of the University of California. He has said he's completely open to the idea. But...

DR. MARK YUDOF: In its current form its, frankly, unworkable.

ABRAMSON: Yudof says it's difficult to see how a state system could track earnings from workers who might move around the country or overseas. In addition, the Fix UC proposal would reduce the state's contribution to the university. Yudof says legislators might like that, but severing that link could be dangerous.

YUDOF: I really do prefer that the taxpayers pay their fair share; that we not treat higher education as a complete private good, in the sense that only the direct beneficiaries pay for it.

ABRAMSON: The Fix UC proposal envisions a minimum for state contributions. Despite these concerns, Yudof says the Riverside students' plan would reach out to the segment that's been suffering the most - middle-class families who don't benefit from many aid programs.

YUDOF: In having a loan program with income-adjusted repayment is a very appealing way to make sure that the middle class continues to have access to higher education.

ABRAMSON: Yudof says he welcomes fresh thinking that might escape the current spiral of declining state aid and increasing tuition.

Larry Abramson, NPR News.

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