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.
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