Keeping student loan interest rates low is important considering the growing mountain of outstanding student debt in this country. But getting students through college without debt would be a far better answer to the problem, and Oregon is looking at one possible way to do that, pushed by groups like the Oregon Working Families Party. The state legislature approved and the governor is expected to sign a bill calling for the development of a
Pay It Forward pilot project, in which students could attend public colleges and universities in exchange for 3 percent of their incomes for a set period of years after graduation:
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.
Such a program would encourage risk-taking and dream-following, with new graduates not starting their working lives saddled with tens of thousands of dollars in debt. The things that have been out of reach for so many graduates in recent years—moving out of their parents' houses, buying their own houses, starting families—would be possible once again. You want more people to take the risk of starting their own businesses? Pay It Forward could make that possible. You want more people to take on rewarding but not necessarily lucrative lives as artists, writers, or musicians? Pay It Forward could make that possible. You want workers to feel able to fight back when the boss exploits or abuses them? It's a lot more likely if they don't feel next month's student loan payment breathing down their necks.
Mind you, the Pay It Forward funds should not be taken as the only revenue stream for public higher education. Students and graduates aren't the only people who benefit from a strong educational system, and states should continue investing in higher education because it creates a stronger workforce, prevents brain drain, and ... well, because it's the right thing to do, not that that argument goes too far these days. But Pay It Forward would be a move in the right direction, a move toward freeing young graduates to figure out what's best for them in the long term rather than just what's going to get the loan payment made this month.