Oregon Trying to Make College More Affordable

With the recent news that there has been an increase in Stafford loan interest rates, students from lower socioeconomic backgrounds are weighing their options for repaying student loans. Oregon college students have also come up with an alternative plan to afford college and the idea is quickly gaining traction in the state legislature.

The Plan’s Inception

The New York Times reports that the idea first began in a Portland University class named “Student Debt: Economics, Policy and Advocacy,” taught by Professors Barbara Dudley and Mary C. King. Dudley was given a connection to John R. Burbank, a devotee to the study of “the no-tuition approach” and also the executive director of the Economic Opportunity Institute in Seattle. She decided to connect a group of students with Burbank, and then she focused their semester project on finding a solution to making college more affordable for lower and middle class students. Within a short amount of time, the students and Professor Dudley found themselves presenting their plan to the state legislature. With the support of The Working Families Party of Oregon and Democratic Representative Michael Dembrow, their proposal was pushed to the top of the legislature’s agenda.

The Plan

Education News describes the plan as an income-based repayment plan. Dubbed “Pay it Forward, Pay it Back,” by Douglas Belkin of The Wall Street Journal, the plan allows students to pay nothing up front to attend college by agreeing to repay the state at the rate of three percent of their income for the 24 years proceeding graduation. The plan would require an initial “investment” of nine billion dollars but after 20 years of the plan in action, it will become “self-sustaining.” In light of the news that U.S. student loan debt is higher than a trillion dollars, Oregon lawmakers are ready to embrace innovative practices like this; similar programs are in practice in the United Kingdom and Australia.

While income based repayment plans do exist at a federal level, Oregon’s plan asks for a reasonable and meager percentage of an employee’s income and establishes a repayment time period that is less likely to financially cripple young and middle-aged adults establishing their careers and families.

The Plan’s Current Standing and Future

The Oregon Senate recently passed a bill to create a study group whose task is to develop a pilot program for “Pay it Forward, Pay it Back.” In 2015, the legislature will determine if the pilot program will be implemented. Mark Hass, a Democratic state senator from Beaverton and major advocate of the bill stated, “We have to get way out of the box if we’re going to get serious about getting young people into college and out of college without burdening them with a lifetime of debt.”

While Oregon is the first state to take serious steps to implement this type of plan, New York, Vermont, Pennsylvania and Washington are considering taking similar actions. Referred to as a “social insurance vehicle” by John Bank, the CEO of the Economic Opportunity Institute in Seattle, Washington, this plan could pave the way for making college more affordable for the lower and middle class.

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