Undergraduates with family income below $200k will be tuition-free at MIT

Or, crazy idea, have the government pay all tuition up front for everyone and then collect an extra .5% on your income tax for every semester you attend (or .33% for every quarter). Obviously you'd have to put some limits on what colleges can charge to get paid from that pool of money.

Then you can't go broke from debt because it's a percent of your income, but it's also not "free" to address those who have concerns with that.

You could apply it to all outstanding school loan balances too. Get your loans paid off in exchange for an extra 4% income tax.

Make this .5% go directly to the university. Will incentivize universities to teach more useful skills

It would incentivize them to only offer majors that lead to high incomes. By pooling the money it removes that issue.

jobs that pay well are a signal that there is high demand for this skill in our society and that more people need to develops these skills.

Why would we not want universities to respond to that signal?

Because the job of a university isn't just to produce highly paid workers. It is to improve society through education. And sometimes people need to learn things that don't pay well, just for the sake of learning them.

People make fun of English and Art majors, but yet the majority of people consume art and writing as their primary activities outside of work (watching TV and movies).

The world would be a sad, boring place without those majors.