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Should we raise or lower tuition fees at Israel's public universities? The fact that there are valid arguments at both ends of the polarized spectrum has not proven very conducive for solving one of the most serious problems currently deepening the country's academic crisis. But there is a third tuition option for solving this issue, one that connects between the compelling facts underlying the two opposing positions, and brings them together with additional elements barely visible on today's public radar.

Twenty years ago, undergraduate tuition fees at public American universities were 8.5 percent of U.S. GDP per capita (the common measure for living standards). In Israel, undergraduate tuition was 15 percent of the country's GDP per capita. Since then, the two countries have switched places - in the 2005/2006 academic year, the ratio of tuition to GDP per capita rose to 14.7 percent in the U.S. and fell to 9.6 percent in Israel.

When this is the only vantage point that one takes on the issue, it is not hard to understand the insistence by some that Israel's tuition fees be raised. In addition, a university graduate is more likely to find employment than a high-school graduate, while individuals with BAs earn more on average, as well. Hence, it is only fair that students be required to finance their education.

On the other hand, the higher the share of college graduates in the population, the greater the national ability to assimilate, utilize and develop new technologies and managerial abilities - which benefits the entire society, including those who never stepped foot inside a university. Therefore, there is justification for society's participation in funding academic studies (this does not even take into account the fact that a large part of academia's cost is the funding of basic research).

But the Israeli scene is unique due to some additional factors. Part of the country's population loses years of market income as a result of mandatory military service. Furthermore, the older a person is when beginning academic studies, the greater the personal obligations and responsibilities, compared with those borne by the much younger American undergrads. And there is a further detail that should be taken into account: Israel subsidizes the studies of Jews who choose not to serve their country - including those among the ultra-Orthodox who also choose not to work.

Consequently, the third option for solving the tuition issue merges a number of national priorities. It is in our interest to draw two segments of the population - who will become a majority in one generation - closer to the mainstream Israeli narrative. It is vital that we stop discriminating for and against (depending on who, and depending on what issue) ultra-Orthodox and Arab Israelis, and begin providing equal rights alongside the requirement of equal obligations.

Just as the Americans enacted the GI bill after World War II in order to assist demobilized veterans to receive an academic education, Israel should behave similarly toward those who sacrifice years of their lives in the service of their country. Every healthy Jew who serves three years of military service and every Israeli Arab who performs three years of national civilian service - even in his or her own community - or military service, should be eligible for reduced tuition, and for non-interest bearing loans that cover tuition and subsistence for the duration of their studies.

Every healthy individual who does not serve his or her country should not receive any public support whatsoever for any sort of studies after age 18. These individuals should pay the full price of universities, yeshivot or any other institution that they wish to study in.

Moreover, it is important to utilize the fact that Israeli universities are among the best in the world. Academic studies in fields like management, economics, computer science, engineering, medicine and so on should be opened to foreign students, who will pay much higher tuition than Israelis, but less than they would to attend universities of a similar caliber abroad.

Since it is difficult to minimize the importance of being able to read and express oneself in English in these fields, Israeli students will graduate better prepared for a globalized marketplace, while many foreigners will return home with a new familiarization with a young, vibrant and humane Israel that is not usually visible in the international media.

The problem is that even if this third tuition option is equitable and reasonable, it has no chance of ever being implemented in our current system of government. The inherent structural instability, the incentives for supporting sectoral rather than national priorities, the systemic inducements that spur cabinet ministers to work only for themselves and against the prime minister (regardless of which particular individual happens to hold the post at any given time) - all of these prevent Israeli governments from planning and adopting long-term strategies in many different areas, including some that are existential.

The author teaches economics in the Department of Public Policy at Tel Aviv University.