Pay Forward, Pay Back Program: New Law may help young Oregonians obtain a college education without student loan debt

A relatively short bill (3 pages), House Bill 3472, has passed both houses of the Oregon Legislature and may completely change how future Oregonians will pay to obtain a public higher education in this state.  This bill currently sits on the governor’s desk, awaiting signature.

The concept behind the Pay Forward, Pay Back Program is that a student will enter into an agreement with the school that allows the student to enroll at the school without paying any tuition or fees.  In exchange, the student agrees to pay the State of Oregon a specific percentage of his/her annual adjusted gross income, for a specified number of years.  The precise percentage of income, and number of years, is to be determined.

Substantively, the law tasks Oregon’s Higher Education Coordinating Commission, a commission with authority to coordinate higher education policy statewide, to “consider the creation of a proposed pilot program called Pay Forward, Pay Back.”  Such a proposal would then be submitted to Oregon lawmakers in 2015 for consideration.

The new law is arguably more aspirational now than anything else, but it is a fresh look at taking on the growing issue of student loan debt.  The law came to be thanks to the efforts of students and faculty at Portland State University.  The model was adopted from the Economic Opportunity Institute.  The Institute’s Executive Director recently gave a short explanation of the model.  For more detailed information about this model you can go to the Institute’s website.

The text of this new law begins with our state legislature acknowledging some of the following points:

  1. The more Oregonians that can obtain a post-secondary education, the better it is for the Oregon economy;
  2. Oregon is ranked 42nd in the United States in terms of state spending for higher education;
  3. As a result, of decreased state support, over the past two decades annual tuition and fees have risen by 133% for 4-year institutions, and by 150% for 2-year institutions;
  4. As a result, tuition and fees are taking a higher percentage of household incomes statewide;
  5. In 2010, 60% of students graduating from public 4-year institutions had student loan debt averaging in the amount of $24,626.  That is a 50% increase from average student loan debt that was measured in 2003.

While there are many details still unknown, it is hard not be excited about this bold approach to addressing the student loan debt issue facing Oregon residents.

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