This is my preferred implementation, as well. Earn a passing grade and you can use your tax credits to pay for them. This also makes it easy to reward those who have already worked their way through the system without acquiring debt - add a line to the Federal tax return, let folks claim the tax credit and voila, everyone who qualifies gets it.
And I would like to take this time to remind folks that this is not a “give-away” to “freeloaders”. There is both a public good and private good component to having an educated workforce, and this payment is the government financing its public good obligation to those who improve the nation through their efforts. Just as we pay for primary education, roads and other infrastructure, we need to fund a trained and educated workforce.
True story - I started an Internet technology consulting company in Canada and it was quite successful, with the bulk of our clients actually outside of Canada, so we were a net importer of foreign exchange for quite a while. Unfortunately, we eventually joined the tech exodus to Silicon Valley as myself and virtually every one of my extremely Internet-savvy employees relocated because of the lack of bureaucracy and wealth of opportunities available in Silicon Valley at the time. Montreal has since figured out how to have a niche tech presence in electronic game development, but the advantage of having a pool of educated workers to draw on is absolutely real and as important as reliable electricity grids (hi, Texas!), water supplies (hi, most of the US west!) and working bridges (hi, most of the US!).
Somewhere along the way, the US has “lost the bubble”, as pilots say, but maybe we can hope that what will come out of the current insanity is a return to some of our more fundamental values. Here’s hoping…