Debt-Free Higher Education

Pay It Forward

Students are graduating with more debt than ever before. Two thirds of Oregon grads are now in debt, averaging over $26, 000 per student in Oregon. 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.

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. Currently, initial start up costs for Pay It Forward will depend on a mix state and federal dollars, private donations by foundations, and the Oregon Opportunity Initiative which will allow the state to sell bonds for public higher education funding. As Pay It Forward expands investment will ramp up to meet demand.

To follow development of the Pay It Forward pilot proposal visit the Higher Education Coordinating Commission PIF work group site. Minutes of each meeting with issues discussed are posted online monthly.

To read studies about Pay It Forward visit the Economic Opportunity Institute website.

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