Should taxpayers fund any and every choice in school and/or major?

[sanantone]

Some have proposed that we end government-backed loans because it'll force colleges to lower their tuition.

I'm one of them. Plus I'd replace Pell grants with a dollar for dollar refundable tax credit, killing Title IV altogether and ending the feds' incentive to subvert accreditors into being financial aid gatekeepers.

A few things that come to mind.

1. Poor, young students wouldn't have money upfront. Sure, Walmart and Target will pay for your tuition, but we can't expect millions of college students to work at a handful of companies. Not to mention that getting a job at these companies isn't guaranteed. Walmart and Target wouldn't even give me an interview. LOL. 

2. Who would be the gatekeepers for the tax credit? Would students get a refund for attending unaccredited schools? Wouldn't that incentivize more companies to create diploma mills and questionable bootcamps? 

3. If tuition becomes tied to employment like health insurance is, what would happen during periods of high unemployment?

1. Schools that serve low income populations and are financially stable can make arrangements to get paid in arrears. Schools that aren't finally stable are circling the drain anyway. Note that this isn't a hypothetical, as Hillsdale and Grove City College actually have a system for this because they don't participate in Title IV on principle. A number of non-participating DEAC schools have figured this out too.

2. State licensure. And I get why you're focusing on the potential downsides to a more open marketplace, but the potential upsides are schools and programs that do things in new ways that actually work better and cost less. When we're approaching $2 trillion of total student loan debt, it's tough to argue that's not needed. But I could see how schools that use a religious exemption to licensure shouldn't qualify, for example.

3. I never said it should be. And if you mean ties in the tax code the way there are for health insurance I would strongly oppose that as I believe you would. But if fronting tuition as an employment benefit is one way that employers compete in what's turning out to be a seller's market even for lower skilled labor, I don't have a problem with that.

Freeloader couldn't have said it better. Realistically, we cannot expect every or even most schools to rely on endowments. Hillsdale uses its donations to replace government grants with institutional grants. They also offer loans directly to students. The schools with huge endowments tend to be prestigious, and their wealthy alumni donate a lot back to those schools. They also receive donations from parents who want to get their kids into those schools and wealthy people who want buildings named after them. Essentially, you will be shutting down colleges and universities that serve poor and middle class students and mid-tier students who can't get into Johns Hopkins or Yale. Schools like Hillsdale will attract donations for political reasons. 

The DEAC schools that don't participate in Title IV funding generally have abysmal graduation rates, and they receive government funds from various military assistance programs. With these payment plans, you are going into debt. If your balance is not paid by the time you finish your program, they will withhold your transcripts. While these payments plans technically don't come with interest, students who are on payment plans usually pay a higher tuition price. Granted, these types of DEAC schools tend to be cheap, but their extremely low graduation rates paired with limited transferability of credits doesn't make them an appealing model for other schools. If you're going to go to a dirt cheap school with a low graduation rate, you might as well go to a community college. At least you can transfer those credits. 

State licensure is often awarded with the stipulation that the institution eventually earn accreditation. If the federal government were to stop regulating accreditors and offering financial aid that is tied to accreditation, I would expect states to follow CHEA's recognition of accreditors or to create their own accreditation bodies. Some states already use CHEA, and more states used to have their own accreditation bodies.