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Oregon May Soon Begin Tuition-Free College Plan

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ABC News is reporting that the Oregon state legislature has unanimously approved a plan to provide free tuition to students while they attend community college and public university. The groundbreaking plan is designed to help students hit by the recent doubling of student loan interest rates.

The program is called “Pay It Forward, Pay It Back”. Its structure is fairly straightforward. It will allow students to go to a public university or community college tuition-free with a binding contract that they will pay a small, fixed percentage of their annual adjusted gross incomes after they graduate from college.

The beauty of the program is that it was conceived and proposed by students. Barbara Dudley, professor with Portland State University’s College of Urban and Public Affairs: Hatfield School of Government, has been heavily involved with the planning and proposing of the program. It was her students that came up with the idea. They worked with Rep. Michael Dembrow, as well as he Oregon Students Association.

Dembrow presented the idea as a House Bill. State senator Mark Hass, chair of the senate education committee, sponsored the bill in the senate.

One of the proposals that Dudley’s students ran with is that all community college students pay 1.5 percent of their incomes for 20 years, and all four-year public university students pay 3 percent for 20 years.

“Essentially what it does is allows you not to carry a debt load,” Dudley said. “It’s not a debt that you graduate with. Your debt-to-credit ratio is not mucked up and you can participate in the economy.”

The average college debt that a student walked out with in 2013 was $35,200. If a state university graduate makes $80,000 per year (AGI) after graduating, and pays 3 percent each year as agreed, that is a payback of $48,000 over the 20-year life of the “loan”. There is, of course, inflation to be factored in. But there are also cost-saving measures that the states can implement with colleges that could make the return on investment even more profitable. If the students stay in Oregon, they contribute to the economy of the state. If they leave, they are still paying back their “tuition”. Meanwhile, they have had no adverse listings on their credit, and their payment remains a percentage, not a prohibitive amount with interest tacked on.

Oregon May Soon Begin Tuition-Free College Plan
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  • Dwk

    So proud to see a photo of my old alma mater, Portland State University representing this phenomenal, progressive change in higher education to keep college affordable for everyone, while our do-nothing, constipated congress allows students to be saddled with even more debt, by doubling borrowing rates! Leave it to Oregon to reject the status quo, and forge ahead by pioneering new solutions.

  • Economics101

    This is brilliant. All the engineering students will find lending sources for their education or go to college out of state. All the basket weaving majors will go with the “pay it forward” plan. We will have even more graduates with absolutely useless degrees, and Oregon will pay for their “education”.

    The Oregon legislators need to take some economics courses.

  • Name

    How many graduates actually make $80K coming directly out of school? What happens if he or she becomes unemployed? I don’t see how this can work in the long term.

    Here is the reality of the situation across the whole nation – the general price level of goods and services has skyrocketed in the past 4 years for really no apparent reason. A pack of gum I used to get for 47 cents now costs 1.17. What the heck has happened in 4 years to cause gum to more than double? We haven’t had any major world crisis.

    There are lots of people getting rich off of a over-inflated pricing structures that have been artificially created. The rich are getting richer because of this and the poor and middle class are being decimated. It is all about greed and 12 years of war that has gained us absolutely nothing.

  • http://smarttuition.sg Tuition

    Education is priceless.