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How will it encourage more students to attend college(the missing party line from your post) ?

I don't think it will encourage more students to attend college. I think the governor wants vouchers to funnel some money to private colleges (may be unconstitutional - stay tuned). The University of Colorado is already struggling with too many students and not enough money. This is a plan that will allow the University to keep their current tuition money and perhaps raise tuition at rates comparable to other state universities. Will increased tuition translate to a better education or merely a more expensive one? Hard to say.
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