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<p>However, the very existence of subsidized public universities indicates that the government has an interest in educating the people, because a better educated population will grow the economy (and tax revenue) more. State governments are “investing” in the population’s education and hoping to get the dividends of a larger economy paying more taxes.</p>
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<p>Earnings of and payment from large number of students can be statistically modeled; the revenue from such a scheme is unlikely to be as volatile as revenue from the state government (which is mostly volatile in the downward direction, since other budget items like K-12, health and welfare, prisons, and limiting taxes are of higher priority, in part due to voter initiatives).</p>
<p>Implementation is certainly not as simple as it seems, since determining what is income that the 5% +/- assessment is calculated from can be complicated (just look at income tax forms).</p>
<p>Also, the proposal does not penalize late graduation; UC does not like late graduation since students staying for extra semesters or quarters take up space which keeps them from taking more new students.</p>