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?
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