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Plan would make tuition free at Oregon colleges

By Steven Dubois

Associated Press

LAST UPDATED: 03:00 p.m. HST, Jul 03, 2013

PORTLAND, Ore. » On college campuses across the United States, the eternal optimism of youth has been throttled out by a fear of crushing student debt. That's certainly the case in Oregon, where the cost of tuition has soared as public funding for higher education has declined.

But the state Legislature this week approved an idea that might ease the economic dread for future philosophy and art history majors. The concept — called Pay It Forward — calls for students to attend public universities tuition free and loan free. In exchange, students would have 3 percent deducted from their post-graduation paychecks for about a quarter-century. The money would go into a fund to pay for future students.

The bill, which passed unanimously and is expected to be signed this month by Gov. John Kitzhaber, directs the state's Higher Education Coordination Commission to develop a Pay It Forward pilot project for consideration by the 2015 Legislature. One question that must be resolved is how to fund the program's start-up costs, estimated at $9 billion, since the initial students who attend tuition-free would be years away from entering the labor force.

Though the timing was coincidental, the bill won final approval on Monday, the same day that federal student loan interest rates doubled from 3.4 percent to 6.8 percent.

"I feel as if the problem of student debt has reached a tipping point. It's on legislators' minds," said state Rep. Michael Dembrow, D-Portland. "And I think it's on legislators' minds because it's on their constituents' minds. This is something we're hearing a lot about — at the doorstep, through our polling, through our e-mail."

The Pay It Forward concept was originated by the Economic Opportunity Institute, a nonprofit policy group in Seattle, and is based in part on a model used in Australia.

A classroom of students from Portland State University, along with the Oregon Working Families Party, successfully lobbied legislators. Supporters say the challenge is just beginning. They must ensure the commission comes up with a pilot program that helps students and clears the 2015 Legislature.

"This is going to happen because students demand change; I believe that firmly," said Steve Hughes, state director of the Oregon Working Families Party. "The conditions are just absolutely ripe for this. We've heard so many stories of student debt that are just beyond belief."

If the plan does take effect, it would provide some relief to students who are unable to translate their degree into a decent-paying job. For example, a student whose adjusted gross income is $600,000 over a 24-year span would pay $18,000 for his or her four-year degree. A student who makes $2.5 million over that same timeframe would end up paying $75,000. Someone who makes nothing at all would contribute nothing to the fund. Someone who makes a billion would contribute an astronomical amount.

"This is not a loan," said John Burbank, executive director of the Economic Opportunity Institute. "You're paying forward, essentially, so your contributions would enable the next generational cohort of students the same free access."

Students who graduate from a two-year college would have 1.5 percent, instead of 3 percent, taken from their paychecks, according to the plan. Those who attend some college but fail to graduate would pay a pro-rated portion of their incomes.

Oregon is the first state to take a step toward the Pay-It-Forward model. Burbank said legislators in other states, including Washington, Vermont, New York, Pennsylvania and Wisconsin, have expressed an interest.

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ellinaskyrt wrote:
This is such an amazingly good and simple idea, on the face of it. Hopefully the details could be worked out and funding available to both student and school benefit. I do see the financial sector fighting this, tooth and nail.
on July 3,2013 | 02:27PM
mikethenovice wrote:
Some state up there also has free city Metro bus service. Is it Oregon?
on July 4,2013 | 06:32AM
1local wrote:
finally middle class kids can catch up to the poor tax payer fed kids...
on July 4,2013 | 08:33AM
onevoice82 wrote:
I think all the 75 year olds should jump on this! Or is there age discrimination in Oregon.
on July 4,2013 | 06:50PM
fairgame947 wrote:
In the meantime who will be paying the bills - teachers, admin., etc? Out of the state budget? I believe Oregon, like HI is running at a deficit already. Also, it's seems it sure is operating on an honor system, how likely is that to work? I have had many family members graduate from Oregon state public institutions, too bad they didn't have this system. They worked their okoles off to go to school.
on July 3,2013 | 02:35PM
ellinaskyrt wrote:
I Googled the program and did a quick skim. The plan proposes implementing the program in stages. It would not work on an honor system but a binding agreement.
on July 3,2013 | 02:50PM
Hapa_Haole_Boy wrote:
allie the mandan huntress. where's the pics?!?
on July 3,2013 | 02:36PM
goodday wrote:
The problem with this is it benefits people who do not want to work once out of college.
on July 3,2013 | 03:08PM
copperwire9 wrote:
What a pathetic comment.
on July 3,2013 | 10:03PM
sailfish1 wrote:
How many philosophy and art history majors do you see working in Hawaii?
on July 3,2013 | 11:37PM
DowntownGreen wrote:
on July 4,2013 | 07:23AM
mikethenovice wrote:
What a you are guilty before proven innocent comment.
on July 4,2013 | 06:34AM
Hugo wrote:
The most cost effective government program ever was the GI Bill. Educated people usually make more money and pay more taxes.
on July 3,2013 | 03:27PM
environmental_lady wrote:
Here are a few questions. Is this bill only for Oregon residents? How can the 3% be deducted if the student goes out of state or out of the country altogether? What if the student dies? Will the parents have to pay back? And what to do about dropouts?
on July 3,2013 | 05:04PM
mikethenovice wrote:
Lots of questions here?
on July 4,2013 | 06:35AM
rigormortis wrote:
The numbers don't add up. Looks like reverse social security. What about dropouts and marginal students that take long time to graduate? It's getting to the point where you need a postgraduate (more $ loans) degree of some sort to make 100k salary/ 3k payment a year. That means you need at least 10 formers for every current student. Ponzi? Everybody move to Oregon to take advantage, then move out when state taxes get too high.
on July 3,2013 | 05:20PM
mikethenovice wrote:
Yeah. Look at all the old men going to college just to meet the young ones.
on July 4,2013 | 06:35AM
SteveToo wrote:
What is the difference w/them borrowing the money and paying it back when they grad? Other than not having any income the first dozen or so years and the possibility that by moving out of State they will never pay anything back???????
on July 3,2013 | 09:44PM
mikethenovice wrote:
It's Christmas in July!
on July 4,2013 | 06:36AM
or_kamaaina wrote:
I wonder how much will be spent, and what kind of priority will be given to the deadbeats who try to elude paying back the owed amount. I'm using existing court-ordered restitution and other compulsive obligations as a reference.
on July 4,2013 | 01:58AM
mikethenovice wrote:
You would not want to know how much was spent. You might not be able to sleep tonight.
on July 4,2013 | 06:37AM
kailua000 wrote:
the lottery scholarships in New Mexico cost the tax payers nothing. North Carolina has free instate tuition. West Virginia has excellent schools and well paid teachers after being at the bottom of the barrel, because of the lottery. Ask permission from Vegas if we can please have a lottery now
on July 4,2013 | 02:02AM
Kalli wrote:
This is another state that has a democrat majority in all offices. Why is it limited to philosophy and art history majors, are those majors that we need to have? I can't believe even Oregon would pass something as dumb as this.
on July 4,2013 | 05:47AM
mikethenovice wrote:
Can't help it if the Democrats want help everyone, and the Republicans want to be selective by helping only the wealthy.
on July 4,2013 | 06:39AM
Cricket_Amos wrote:
If the plan is going to be financially self-sustaining, then those who are working and making money are going to be paying off the student loans of those who are making very little. In other words, the engineering majors will be paying off the student debt of the sociology majors. Let's see, who came up with this?
on July 4,2013 | 06:55AM
steveoctober wrote:
Bottom line, it would be civally unenforceable outside of Oregon. There's no way they could pursue you unless they turned it into a criminal violation. It's not even a valid debt as it's not a loan so nothing can even show up on your credit report. Likewise, no judgments can be obtained. It's just an honor system of repayment.
on July 4,2013 | 07:44AM
Bully wrote:
We should legalize marijuana tax it and use the money to fund education. Those that dont want to be productive members of society can pay for those that do.
on July 4,2013 | 07:41AM
psimmons wrote:
Oregon universities will attract the best athletes because essentially all students will be on scholarship. The fact that the state of Oregon is doing this surprises since Oregonians don't like outsiders, especially Californians, relocating to their State. Surely they must know that by doing this an influx of outsider will settle in their State.
on July 4,2013 | 01:00PM
huponews wrote:
Hawaii law makers, wake up and follow Oregon to eliminate college tuition. We are 25 years behind them....we also need to pass a scratch ticket lottery like they did 30 years ago to fund public education. 100% of all lotto fund go to public education....do it now..
on July 4,2013 | 01:50PM
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