The money for those dividends comes out of the original payment and tax money. I'll be back later to finish reading the article. Night.
Yes, the government pays the dividends. And the government will also "match" the dividends going to investors with funds going to education for that particular field.
So, the government is only paying the interest. But, much more is actually going towards education. For every $6 that the GOVERNMENT spends on education, $103 would go to education ($3 government dollars to the investor, $3 back to the education in matching funds). That's a 1,716% return on the Government's investment in year 1. That ROI will go down over time, and I'm crunching the math on a possible program to "buy back" these EduBonds.