Debt-Free Higher Education

Pay It Forward

Pay It Forward (HB 3472) will provide access for all Oregonians to a debt-free degree and protect funding for public higher education. It directs the Higher Education Coordinating Committee to examine and implement a Pay It Forward pilot program and a tuition freeze.

Steady cuts to public funding for higher education have led to sky-rocketing tuition and mountains of debt for students and families.  Pay It Forward, or House Bill 3472, is the solution.

Most Americans see a college degree as a key to financial success and  economic mobility.  But, with ongoing funding cuts to higher education causing tuition to soar, students and parents are making tough choices about whether they can afford a college education

Students are graduating with more debt than ever before.  Two thirds of Oregon grads are now in debt, at an average of nearly $25, 000 per student.  Loans to parents for their children’s education have risen 75% since 2005.  The average student loan debt for parents is now $34,000.  This unsustainable for Oregon working families, and for our nation’s economy.

The Pay It Forward solution offers students access to higher education without debt.  Students at public universities and community colleges would pay no tuition up-front.  In exchange, they would agree to pay a small percentage of their income (1.5% for community college, or 3% for a 4 year school) for 20 years to “pay forward” the cost of instruction for the next generation of students.

Pay It Forward is a social insurance program, not a loan.  Students would have no debt, no interest, and their percentage would never change.  Instead, graduates would pay their contribution as a payroll deduction, similarly to how we pay Social Security taxes.  This means that their contribution would be a dependable, affordable expense.  For example, a recent grad making $30,000 a year would pay $900 a year.  Later on, when they make $60,000 a year, they would pay $1,800 per year.

Over time, the Pay It Forward plan will create a stable funding stream for Oregon public higher education.  As more students graduate and pay in, the fund will grow, allowing more students to participate.  Start-up funding will be needed until the first few generations of students graduate and get into jobs where they can pay it forward. This could come from private grants, or public money.  One option would be to start with a pilot program at a specific institution, and expand to others as the program grows.

Want more information?  Read the report by Students for Educational Debt Reform.

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