Pay It Forward FAQ

Have more questions for us? Email us at oregon@workingfamilies.org.

How can I apply for Pay It Forward/Do I qualify for Pay It Forward?

HB 3472 charged the Higher Education Coordinating Commission (HECC) with creating a proposal for a pilot program that will be proposed before the 2015 legislature.

Is Pay It Forward a loan?

No, Pay It Forward would create a dedicated fund that would eliminate tuition and debt. Students attend school tuition-free, and then begin contributing a small, fixed percentage into a common education fund. Pay It Forward isn’t paying back a loan, it’s paying forward a guarantee of free higher education to future students.

How is this different from income-based repayment?

Under income-based repayment, graduates would have to pay taxes on the sum of money forgiven, as if they had actually received that money. Pay It Forward is a better deal for students. Under income-based repayment, most students would be paying 10% of their income for 10 years. Under the Pay It Forward system, a graduate with a Bachelor’s would pay 3% of their income into the fund for 20 years (still a shorter time than it takes many graduates to become debt-free).

Will Pay It Forward apply to people who are in school or already have student debt?

We wish. The graduates that have been saddled with debt in Oregon need aid, but unless the state of Oregon chooses to buy out that debt, enrolling people who have already graduated isn’t feasible.

What if I can afford to pay for school, or want to opt out of the Pay It Forward?

Students who have the ability to pay for college on their own would be even better off under the Pay It Forward system. That money could go towards a house or car. Pay It Forward will restore the next generation’s ability to enter the middle class upon graduation. Students who really want to avoid participating in the system is could still attend a private or out of state institution. Students could also use their college savings to make their contribution into the Pay It Forward fund.

What percentage of my income would I pay?

That depends on how much education you receive. Under the proposed system, you would pay .75% of your adjusted gross income (AGI) for each year of school, or 45 credits. This means a student who goes for a 2-year degree would pay 1.5% of their AGI per year, while a student seeking a 4-year degree would pay 3%.

Will it replace state funding for higher education?

No. It’s critical that the state continues to invest in higher education, and even with Pay It Forward in place, the level of funding for higher education in Oregon needs to increase. Oregon has set itself ambitious goals for higher education and unless the state increases its investment in its university system, these goals will never be met.

What if I’m unemployed?

Unlike income-based repayment or a traditional student loan, unemployment wouldn’t affect your status with Pay It Forward. If you aren’t making income, you aren’t contributing to Pay It Forward. When you start making income again, your monthly contributions to Pay It Forward will continue as normal.

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