HIGHER EDUCATION BUBBLE UPDATE: No Such Thing As Free Tuition.

When an advertisement says “No money down,” an asterisk and some fine print typically follow. And it’s probably wise to look for that.

That seems to be the case with an Oregon proposal that has generated headlines such as “Plan would make tuition free at Oregon colleges,” “Oregon is doing free higher education the right way,” and “Oregon looking to eliminate tuition and loans for higher education students.”

Despite the headlines, the state didn’t suddenly abandon all plans to charge tuition. Last week the Oregon legislature took the first steps toward possibly implementing a plan that would allow public college and university students to forgo upfront tuition payments in exchange for paying a portion of their wages back to their alma mater for about 25 years following graduation. While it may mean no money down, it could still add up to large tuition bills.

Yale tried something like this in the 1970s and it didn’t work out very well.