Oregon legislature passes bill to “provide tuition to students while they attend community college and public university.”
The legislation, which was approved unanimously by the Oregon State Senate on Monday, is called “Pay it Forward, Pay it Back,” and is intended to allow students “to go to a public university or community college tuition-free with a binding contract that they will pay a small, fixed percentage of their annual adjusted gross incomes after they graduate.”
The next step is for Oregon’s Higher Education Coordinating Commission to develop a pilot program for the “Pay it Forward, Pay it Back” plan, and in 2015 lawmakers will have to decide whether or not to implement the proposed program.
Barbara Dudley, a professor with Portland State University’s College of Urban and Public Affairs: Hatfield School of Government, and her students are responsible for coming up with the plan. According to ABC News:
Dudley’s Portland State University students conceived of “Pay it Forward, Pay it Back” and presented the idea to state legislators, including Rep. Michael Dembrow, a Democrat. It was developed with other organizations, like the Oregon Students Association, and supported by the Working Families Party, of which Dudley is a founder. Then Dembrow presented a House bill with the idea.
Democratic state senator Mark Hass, chair of the senate education committee, was the sponsor of the bill in the senate.
“This is what thinking out of the box looks like,” Hass said. “Somebody’s got to come up with something. Look at what U.S. Senate did. They couldn’t even resurrect status quo, which wasn’t working. If we don’t do something dramatically different, we’ll continue sticking kids in college who aren’t able to pay for it.”
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According to Fidelity, “The average amount of college loan debt from the class of 2013 was $35,200.” And thanks to Congress not acting last week, the interest rates for student loans have now doubled, going from 3.4% to 6.8%. Meaning that most graduates enter the work force carrying a significant amount of debt. Dudley explains, “Essentially what it does is allows you not to carry a debt load. It’s not a debt that you graduate with — your debt-to-credit ratio is not mucked up and you can participate in the economy, which is a novel thought.”
One financial model proposed by the students makes the recommendation that:
All community college students pay 1.5 percent of their incomes while all four-year public university students pay 3 percent—both for the duration of 20 years after graduation.
This model would allow for students to graduate and enter the job force without already carrying debt they must struggle to pay off, while also giving those coming behind the same opportunities they had.
What do you think?
Could Oregon have found a possible way to alleviate student debt?
My biggest problem with the pay it forward act is that it only activates after graduattion. What about all those kids who get a free ride on government pell grants, and never graduate. We poor millions into kids who don’t value the education given to them, then they fail out, and the money is wasted on them. So what happens when the pay it forward program selects one of these kids who just fail out? The money is gone, and you are in a deeper hole than what you started in. For this program to work, there needs to be… Read more »
Today Tom Ashbrook with On Point will be doing a show on this Oregon legislation. It will definitely be an interesting show. Check it out on NPR or at http://onpoint.wbur.org/ways-to-listen
I’m sure it will provide some interesting insight and discussion on this topic.
I have a problem with the concept that a percentage of income should go to student loans for a fixed period of time, why not lifetime? Why not after a certain amount is paid, the debt goes away regardless of the time spent paying it? I look at the gender gap in education 57% of undergrads are women and wonder why is student debt an issue now? When most students were men it didn’t matter how much debt they graduated with or what the interest rate was. Should I be surprised that the solution is one geared to benefit women… Read more »
Why not? Because at least as reported, it’s not a debt, it’s a contract. It’s not for any fixed *amount*, and it recognizes that the earning potential of graduates varies hugely, depending on a whole bunch of factors, most of which are down to luck. A graduate who goes on to earn millions — or, heck, even one who gets a standard middle-class office job — is going to earn a LOT more than someone who ends up making coffee (or, indeed, jobless) after graduation. 3% of their income is going to be a lot more than of a poorer… Read more »
Why not simply state that student loans can’t appear on credit reports? That solves the problem of debt. Student loans can’t be cleared with bankruptcy so they should be treated differently. Why not have students pay a fixed percentage as “interest”. Interest seems to be one of the largest problems with the loans.50k in loans would require a student to pay back 55k over their lifetime with payments being capped at 3% of a graduates salary in any year. Why should a student athlete, especially one who may generate positive revenue for a school, but receives only a partial scholarship,… Read more »
@John Gottman Anderson John, you are very narrow minded and your ignorance permeates every sentence you have written. It isn’t worth me debating what you have stated and to be insulted by you would be beneath me. All I can say is I pity your children should they ever have you as a father and your wife should she have the misfortune of having you as a husband. Your views are as ingrained in the selfishness that gives capitalism a bad name. A social welfare state is one that looks beyond itself. America is a meritocracy that encourages the growth… Read more »
@ smeetha You obviously haven’t accomplished much in your life. I’d normally respond with vitriol, but individuals like you are probably more deserving of compassion that contempt. If you can look past your own perceived failings in life, here is a concept you might be able to grasp. Sure, education helps people get out of poverty or should. It seems that this article is arguing that it doesn’t always do that. You acknowledge that in your comments, but seem to want to perpetuate that by essentially subsidizing fields where graduates gain no marketable skills. I understand people wanting to follow… Read more »