Social justice objection to cutting education subsidies

Worry: Cutting education funding will disproportionally effect the poor and increase inequality.

This is a valid concern under the human capital hypothesis.

If Education is mostly signaling however, the average level of education has no net effect (other than cost!). If everyone is given full scholarship to college, then everyone is forced to get more advanced degrees to effectively signal. Decreasing the average education thus reduces total cost without affecting total workforce skill or inequality.