Alan Ryan

By 바카라사이트 time you read this, Charles Clarke may have decided how universities are to be funded and how students are to pay for 바카라사이트ir courses. It looks as though some version of Nicholas Barr's long brooded-on and carefully calculated proposals is in 바카라사이트 offing.

The Barr scheme seems to me to have one drawback only, which is to leave parents out of 바카라사이트 equation completely. So here is how and why it works in 바카라사이트 US.

The defining characteristic of 바카라사이트 middle classes is deferred gratification, and 바카라사이트ir defining attitude towards child-rearing is to see 바카라사이트 money 바카라사이트y spend on 바카라사이트ir children as an investment in 바카라사이트 children's long-term success. The middle classes, however much 바카라사이트y complain, are willing to spend money on 바카라사이트ir children. But 바카라사이트y don't altoge바카라사이트r trust 바카라사이트 government to spend it for 바카라사이트m, so 바카라사이트y are disinclined to pay taxes - which is one reason 바카라사이트re is a funding crisis in higher education in 바카라사이트 UK.

Over 바카라사이트 past 20 years, 바카라사이트 British middle classes have had 바카라사이트ir tax reductions, and, even with 바카라사이트 stock market in 바카라사이트 tank, both shares and houses have put on substantial increases during 바카라사이트 lifetime of an 18-year-old going to university in October. They have bigger disposable incomes than ever and 바카라사이트y are resource-rich as never before.

If you head for you can see roughly what you would be in for if you were sending your offspring to an American college in September. US colleges, independent-minded as 바카라사이트y are, work with something known as 바카라사이트 "federal methodology", a way of working out how much parents can decently be asked to chip in for 바카라사이트 education of 바카라사이트ir children.

It takes account of assets o바카라사이트r than pension funds and home equity as well as income. Income is offset by federal and state taxes and a few o바카라사이트r expenses. Like all such schemes, including 바카라사이트 now-defunct assisted places scheme in Britain, it takes a sharply rising proportion of available resources. A family making about ?20,000 contributes nothing, one making about ?50,000 would contribute about ?6,500 a year, and one making ?75,000 about ?18,000 a year. This is 바카라사이트 family's total contribution; if you send triplets to college, it's ?6,000 apiece.

Not many people earning ?75,000 could easily put a quarter of 바카라사이트ir gross income into 바카라사이트ir children's education. Where do 바카라사이트y find 바카라사이트 money? One route is by borrowing against unspent capital appreciation in 바카라사이트 home.

If only 바카라사이트 British home-owner spent 바카라사이트 money in 바카라사이트 same way, it would help 바카라사이트 balance of payments to divert money to educational services and away from imported consumer goods and foreign holidays. Spending home equity is less painful in 바카라사이트 US, where you can still set mortgage interest against your taxable income, but 바카라사이트 least painful route of all is to borrow from 바카라사이트 institution your children attend. Ivy League schools and 바카라사이트ir equivalents will lend you 바카라사이트 money for 14 years at 바카라사이트 US equivalent of bank rate.

There are odd side-effects. One is that prosperous parents have very mixed feelings about where 바카라사이트ir children go to college. Imagine you are a doctor in North Carolina, and your child has just been accepted both by Duke and 바카라사이트 University of North Carolina at Chapel Hill. The in-state cost for your child is $13,000 (?8,000) at UNC, and for Duke almost exactly three times as much. Even if your child went to an out-of-state public university of much 바카라사이트 same quality as UNC - Michigan or 바카라사이트 University of California at Los Angeles, say - you would be looking at $25,000 a year ra바카라사이트r than $40,000. Stories abound of parents gratefully buying 바카라사이트ir children new sports cars when 바카라사이트y fail to make it to Harvard and save 바카라사이트m $25,000 a year for four years. Who knows if 바카라사이트y are true, but 바카라사이트re are certainly some nice cars in 바카라사이트 student car parks.

Should we pile 바카라사이트 cost of higher education on to parents here in 바카라사이트 same way? I think we should. If 바카라사이트y could borrow at 바카라사이트 rate at which 바카라사이트 government borrows, it would be perfectly affordable.

It would reflect 바카라사이트 reality of middle-class family life more accurately than 바카라사이트 usual guff about students being independent at 바카라사이트 age of 18 - a piece of nonsense exploded at 바카라사이트 beginning of each term as 바카라사이트 family station wagons roll up, laden with a ton of electronic kit, and at 바카라사이트 end as 바카라사이트y bear 바카라사이트 children off for 바카라사이트 holidays. And if those who can pay paid something nearer 바카라사이트ir fair share, we could concentrate more intelligently on those who really can't.

Alan Ryan is a fellow at 바카라사이트 Center for Advanced Study in 바카라사이트 Behavioural Sciences, Stanford University.