Posted in: Education

‘Pay It Forward, Pay It Back’ Plan In Oregon Would Make College Tuition Free

affording college with student loan interest rates increasing, pay it forward plan in Oregon

Portland, OR – An innovative Pay It Forward, Pay It Back plan, unanimously approved by the Oregon state legislature, may ease the economic dread for future students wanting to get a higher education by essentially making college tuition free.

With recent student loan interest rate increases and tuition costs climbing steadily every year, a soon-to-be college freshman may find the expense just too much to bear and abandon the goal of a degree. But the concept of the Pay It Forward program would allow students to attend public universities tuition free and loan free.

The traditional set amount of tuition would be eliminated.

In exchange, four-year degree earning students would have 3 percent deducted from their post-graduation paychecks for up to 24 years thereafter, reports the CNN. Two-year college grads would repay at a 1.5 percent rate and those who attend some college but fail to graduate would pay a pro-rated portion.

The collected reserve would be specifically earmarked to fund future students, permitting them the same educational opportunities. Oregon is the first state to undertake a Pay-It-Forward model.

If the plan were to take effect, it would provide some relief to students who are unable to translate their degree into a high-paying job. And taking a small percentage would ensure the likelihood the individual would be able to afford coffer replenishment verses paying it back with high interest student loans.

The Pay It Forward concept was originated by the Economic Opportunity Institute, a Seattle based nonprofit policy group, and was designed in response to the declining availability of public funds for higher education in the state, reports the Huffington Post.

However, one looming issue that still must be resolved is how to fund the program’s start-up costs, which have been estimated at $9 billion – as initial students who attend tuition-free would be years away from entering the labor force and beginning repayment.

Steve Hughes – state director of the Oregon Working Families Party, a group that lobbied alongside Portland State University students – said, “This is going to happen because students demand change; I believe that firmly. The conditions are just absolutely ripe for this. We’ve heard so many stories of student debt that are just beyond belief.”

The bill is expected to be signed sometime this month by Governor John Kitzhaber.

What do you think about the Pay It Forward model? Is this a good alternative to student loans? Would you have elected to try it when you were in college?

[Image via Shutterstock]

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Comments

10 Responses to “‘Pay It Forward, Pay It Back’ Plan In Oregon Would Make College Tuition Free”

  1. Paul Morgan

    It's not free really; it's deferred payment – if you work, you still pay 1.5% – 3% of earnings.

    That being said, it's a creative scheme to create better adoption of education which is currently prohibitively expensive for anyone other than those born with a silver spoon.

  2. Pat Melton-Stark

    I'm not sure if the plan would work, but it's something to consider as an alternative to the massive sum students will currently owe after leaving college. Many students would probably prefer this method, if they were assured that the amount deducted would never exceed the 3% maximum. I'll certainly be interested in seeing how it works out, if it is indeed passed.

  3. Apolinaras Sinkevicius

    I actually like it, since it does create motivation for the schools to prepare students to be better earners. Problem with most US education now is that it is not that relevant to the real world.

  4. Joe O'Neal

    Interesting program but I don't understand why students don't work their way through college? Everyone I went to college with did and they didn't take out any loans. I saved most of the money I earned in high school, worked everyday of the summer while in college, and worked fifty hours a week while attending full time. I also graduated debt free with a decent amount of savings. My daughter's starting college this year and we're making her work her way through as well. If she graduates we'll reimburse her.

  5. Jenn Burns

    @ Joe O'Neil….college is more expensive today, even with inflation. Students can't afford to pay for college at today's tuition AND work a min. wage job (Min. wage by the way should be much higher than it is if adjusted for cost of living)…some people CAN work 50 hours a week, pay for school with that money, AND rent, food, etc…AND get straight A's in school needed in order to be competitive in today's market…but reallly, how many can do that? Tuition NEEDS to be equivalent to where it was when you went to school.

  6. Matthew Morrison

    Well good for you Joe. I'll say this once – You cannot pay for college by working a burger flipping job at minimum wage anymore. I could put myself through school in the late 60's and early 70's working a minimum wage job waiting tables. Times have changed and if we truly had a "Living Wage" that is a wage we can pay for school and make living then your suggestion might work. If the minimum wage had kept pace with the rise of executive salaries since the late 1980's today's minimum wage worker would be making more than $23 dollars an hour.

    I always seems to hear the same old right-wing batcrap crazy argument that if you just work 50 hours a week you can make through school. Some people can and some can't. My friend David was a straight A student and had lots of rigorous sciences courses which required labs and outside of class work – he took a 40+ hour a week job and flunked out. Just because someone else did does not mean others can.

  7. Matthew Morrison

    I think making college free is right around the corner. It's the only way – saving for college by working burger flipping and odd jobs after school is an inefficient, impractical and outdated method to getting college money. I did working a job waiting tables in the late 60's and early 70's – back then you could pay for college with what you were paid – not today. Also, course work today is far more rigorous than it was back than and you have to work a lot projects out of class which leaves for little time.