Oregon legislators are in the spotlight after voting to have a commission study a new tuition plan for state public colleges. The plan, known as Pay It Forward, provides a means to pay back tuition costs as a percentage of income, rather than fixed payment installments on a loan package. If the committee finds the plan will work, it could be implemented as early as 2015.
While the idea seems great on paper, application will be very tricky.
Taxpayers would still be responsible for a portion of the state’s higher education bill. Start up of the plan would take about $9 billion over a quarter-century before enough former students are paying into the program to cover its costs and keep the program self-sufficient.
Considering Oregon has no sales tax and only relies on property and income taxes, it could be difficult to find the money. Funding outside of taxes would absolutely be necessary.
John Burbank, executive director of the Economic Opportunity Institute, created the plan in a policy paper last year. It is modeled after Australia’s current tuition system.
The basic idea is this: You earn a lot, you pay a lot; you earn a little, you pay a little. But most importantly, nobody has to take out loans to cover the cost of classes.
“[Students] pay a small percentage of their adjusted gross income for a number of years after college: 0.75 percent per year of community college, or 1 percent per year of university, for 25 years,” Peck and Burbank said.
However, Oregon’s current take on Pay It Forward is much more vague. Currently, the bill’s text doesn’t provide a specific percentage or payment period. Supporters of the bill told The New York Times the approximate numbers are 3 percent over 20 to 24 years.
Despite the roadblocks that need to be overcome, the plan has some serious upsides that make it worthwhile to look into.
The plan would eliminate most student loans. Considering federal student loan interest doubled last week, this is a significant win. Any scholarship money that a student does receive doesn’t have to go to tuition and instead can be spent on living expenses, housing, books, groceries or whatever they want.
In addition, if students don’t have to worry about student loans, they have an incentive to choose a career based on personal fulfillment, rather than one that pays significantly more in order to pay down student debt.
The plan is also very progressive in that the future “1 percent” will pay the most for their educations. Graduates who have devoted themselves to low-pay careers, including teaching, will pay the least.
In addition, poor students might strive for opportunities they couldn’t before. Some low-income students do not apply to top schools due to the “sticker shock,” according to Associate Professor of education policy studies and sociology Sara Goldrick-Rab of the University of Wisconsin-Madison.
Many students see the price and assume they can’t afford it, even if the admissions office promises that they’ll provide ample financial aid.
Under Pay It Forward, up-front tuition is no longer an issue, and there’s no need to guess about grants and other aid.
The plan is far from being implemented and has quite a few kinks to work out, but it has heart.
The national attention garnered by this plan goes to show how frustrated Americans have become with student debt. There is no easy solution to solving the student debt crisis and reducing higher education cuts, and while the plan is a good start, we can only hope Oregon politicians and the committee will find the best solutions for students.
Elizabeth Garcia is a 21-year-old mass communication senior from Greensboro, N.C.