Tuition debt proposal 'pays it forward'

KOIN:

By Rachel SeigneurThe Portland TribuneWhat if you didn’t have to pay anything up front to study at a university or community college? Sounds too good to be true, right? The times are calling us to rethink how we fund college education, says Steve Hughes, state director of the Oregon Working Families Party. “We need to turn on its head debt for education,” Hughes adds.That’s why the party is teaming with the anti-poverty group Jubilee Oregon and students in a Portland State University class to promote a new “Pay it Forward” approach to funding higher education.Under the Pay it Forward plan proposed to the Legislature as part of House Bill 2838, Oregon students would pay no tuition to attend a public university or college. Instead, they would pay a small percentage of their income for a set number of years after they graduate.The House Committee on Higher Education held the first public hearing on the bill last month, and the idea has support from the influential committee chairman, state Rep. Michael Dembrow, D-Portland. It’s an innovative approach to the student debt crisis that our country faces, Dembrow says. “It is a great program because there is a kind of shared responsibility component to it.”Across the country, students have amassed more than $1 trillion in outstanding college loan debt — surpassing the nation’s total credit card debt.How would Pay it Forward help alleviate that growing mound of student debt? Under the plan, university graduates who land a job and, say, make about $30,000 a year would pay 3 percent of their annual income, based on a fiscal analysis by the Oregon Center for Public Policy, a progressive think tank. That’s $900 a year, or $75 a month, for an estimated 20 to 24 years.Students earning two-year degrees in the same scenario would pay about half that amount, or 1.5 percent of their income.Grassroots optionsThe Pay it Forward idea came from research by John Burbank at the Economic Opportunity Institute in Seattle. Oregon is one of several states considering the proposal, and is the first out of the gate with a bill before a state legislature.Many options are still under discussion, and details need to be sorted out.Under the bill being pioneered by Oregon, the proposal is to start with a pilot program, say by testing the idea in a few smaller colleges and universities. One idea is to launch an experiment with incoming students at Portland State for five years. Then a task force would use the experience to iron out some of the details for a permanent program.PSU is in the mix because the impetus for the bill took root in a senior capstone project at the university called “Student Debt Economics, Policy and Advocacy.” Students inspired by the class decided to push the idea to help future generations of students. They formed the group Students for Educational Debt Reform and joined with coalition partners.“It moved fast — we started this class in September and here it’s March already and we have already had a legislative panel in December and a hearing on it,” says Tracy Gibbs, a PSU student who is a member of Students for Educational Debt Reform. She testified last month before the House Committee on Higher Education.“I think for a lot of them it is really restoring their faith in the system,” Dembrow says of the students involved with the lobbying campaign. The PSU capstone class examined parallels with developing nations’ debt and the mortgage and credit card debt crises. Students also investigated various policy options and grassroots advocates’ options, with help from the Working Families Party and Jubilee Oregon. That’s where they came upon Burbank and the Economic Opportunity Institute’s Pay it Forward proposal, then being prepared for consideration in the state of Washington. Other states that are jumping on the Pay it Forward bandwagon include California, Vermont and New York.Backers hope the option would be open to students of all majors and all socioeconomic backgrounds.“I think that is the beauty of Pay it Forward,” Gibbs says. “It’s for everyone, by everyone.”Hughes sees other benefits from alleviating student pressure to pay for college. “It gives students an incentive to do jobs that help society, for example becoming a teacher,” he says. A work in progressTo get the ball rolling, advocates are seeking private grants along with state bonding to pay for start-up costs. That would fund the first round of students, with the money ultimately repaid, making the program self-financing in the long run.Supporters of the bill have been in contact with State Treasurer Ted Wheeler to get his support for the bonding capacity. Wheeler is the prime backer of another proposal to expand need-based financial aid, the Oregon Opportunity Grant program, via $500 million in state bonds.Students taking part in Pay it Forward could be tracked through the Internal Revenue Service if they were to leave the state or country, to assure the money gets repaid.It’s still a work in progress, Hughes says. “It’s the first step on a fairly long road.”Hopes are high that the pilot program will start in summer 2014, though Dembrow says winter 2014 is more realistic.“I think what’s going to happen,” Dembrow says, “is that it will remain in the mix over the next year, which is pretty exciting.”

Read the full article here. Discuss below.

connect with blueoregon