Oregon lawmakers are considering an entirely different way of helping students afford college education that would not leave them struggling within mountain of debt when they graduate. Under a plan being considered within the state Legislature, a university education would cost students nothing upfront, but in exchange, students accept pay the state 3% of the annual income for twenty-four years after graduation.
Douglas Belkin from the Wall Street Journal reports the plan C called \”Pay it Forward, Pay it Back\” C would allow students to pay their tuition from the state-maintained fund. Those who take advantage of this money would pay a small part of their future salaries back into the fund, which may then be employed to pay the tuition of other students going forward.
Initially, the fund could be seeded by a government investment of about $9 billion, but is projected to become self-sustaining after two decades.
Oregon’s Senate on Monday unanimously passed an invoice, already approved by the House, that produces a study committee faced with developing a pilot program for Pay it Forward, Pay it Back. The legislature will decide in 2015 whether to implement the pilot.
“We have to get way out of the box if we’re getting serious about getting young people into college and out of college without burdening them with a lifetime of debt,” said Mark Hass, a Democratic state senator from Beaverton, Ore., who leads the chamber’s education committee and who championed the bill. The legislation was supported by the Working Families Party.
The Oregon proposal follows the blueprint set down by the Economic Opportunity Institute, a non-partisan non-profit located in Washington that are experts in analysis of monetary issues probably to impact the middle class. Oregon may be the first to consider concrete steps towards adopting the plan, but lawmakers in Washington, Ny, Vermont and Pennsylvania will also be considering its future viability.
John Burbank, EOI’s executive director, sees the program as a \”social insurance vehicle\” designed to make the upfront price of attending college less prohibitive to middle-class families.
The Oregon effort may come as public funding for advanced schooling has plunged, tuitions have surged and also the total student-loan debt in the U.S. recently surpassed $1 trillion. On Monday, rates of interest on certain government tuition loans doubled to 6.8% after the Senate failed to block the rise.?Oregon’s plan has parallels to income-based repayment models used for decades within the U.K. and Australia, and more recently within the U.S., in which borrowers pay government lenders a share of the incomes to pay for education loans.