Free College Now, Pay for It Later?

Oregon lawmakers have passed an measure that would allow students to attend college at no upfront cost for tuition, with an agreement to contribute a percentage of their future income to repay the state.

It’s not a loan or a scholarship — this is something new.

Both houses of the Oregon Legislature unanimously passed a plan that could eventually allow students to attend state colleges without paying for classes. “Instead, they would commit a small percentage of their future incomes to repaying the state; those who earn very little would pay very little,” The New York Times says.

Supporters say the model has been used successfully in Australia and is a “pay it forward” approach: Former students would be paying to help current ones attend. Experts told the Times they know of no university in the U.S. using it, but a group of Portland State University students latched onto the idea last fall and pitched it to legislators as a class project.

The Working Families Party of Oregon prioritized the proposal, and both Democrats and Republicans backed it. “House Bill 3472 — now on Gov. John Kitzhaber’s desk — directs the Higher Education Coordinating Commission to study the model of funding, and, if it has merit, to design a pilot project for the 2015 Legislature to consider,” The Register-Guard says.

“What we were really trying to get at is [to] eliminate the role that banks are playing in charging interest and fees to students,” party director Steve Hughes told the paper. Students would contract to pay 3 percent of their annual income after graduation into a higher education fund for 24 years.

Oregon grads with federal loans leave school with an average of $24,616 in debt, The Register-Guard says. That number may rise considerably now that interest rates on new subsidized federal loans have doubled. As proposed, the plan would have graduates who make $30,000 a year putting $900 of that into the state fund, without ever getting into student loan debt.

What do you think of the proposal? If this were an option for you or your kids, would you take it? Share your thoughts on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

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  • Grace McCarter

    I’d take this! I work to pay my own way through college meaning I can only take classes for my degree after I’ve saved for them. I could hit the books a little harder and faster with something like this in Maryland. And its only for 24 years, I think it’s a brilliant idea and keeps you out of debt! You find a job you pay, which is great because so many graduates are having a hard time finding jobs!

  • Michyle

    Now this is a Ponzi scheme if ever I saw one, Most students do not know enough about loans ect to really understand what they are getting into. This sounds to easy, and to Quote Mark Twain…”If something sounds to good to be true…..IT IS!!!!

  • OregonStudent

    How would this plan handle the low college success or persistence (transferring out of state or to a private institution and not graduating) rates? The current federal student default rate on student loans is very high- mostly on students that start and never finish. Interesting idea.

  • Malcom Treadway

    “Those who earn very little would pay very little.” Duh. If you thought people UNDER-reported their income in the past, just wait.

  • Manuel

    fantastic idea…. the concept that anybody could access higher education not only will benefit that particular student but society as a whole. Like anything new, refinements will have to done along the way but none the less a great point to start from

  • LC

    3% for 24 years could have the potential for being pretty steep…study engineering and get a great job that’s paying you 65-75 a year and you’re going to be paying back more than what you would have spent if you had just paid for it afterwards. It seems like a great idea in theory, just needs to be worked out a bit.

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