By graduation, the average Oregon college student will have accumulated nearly $25,000 in debt. Loans taken on by parents for their children’s education have increased by 75 percent since 2005. The average loan taken out by parents equals approximately $34,000.
These statistics, gathered by the Oregon Working Families Party, are alarming, according to OWF State Director Steve Hughes.
“My belief, as is the belief of Oregon Working Families, is that education is a public good, and we’re treating it like a private gain,” Hughes said.
The OWF is working to turn the current system on its head with House Bill 2838. The bill, which had its first hearing last Monday, proposes setting up a task force and pilot program for the “Pay it Forward, Pay it Back” system. The system, researched by the Economic Opportunity Institute in Seattle would essentially eliminate tuition for students. Instead, after graduation, students would pay a fixed amount of their income for a predetermined number of years into a fund which would allow future students to go to college tuition-free and eventually contribute to the same system.
“This is a really big departure from the education model we are using, (which) has gotten out of control,” Hughes said.
The unorthodox solution has brought hesitation from some. According to Oregon University System Director of Communications Diane Saunders, while an innovative proposal is needed to solve the student debt problem, many details of the plan would need to be clarified before the “Pay it Forward, Pay it Back” system could be implemented.
While the system could remove some of the upfront financial barriers to attending college, Saunders said that sustaining the funds necessary to eliminate tuition could be difficult. According to Saunders, the funds would take a certain number of years to build up. Additionally, the pool of funds would be heavily tied to the economy, and Saunders said the university system could lose money if students were unable to pay into the pool due to recession and having to file bankruptcy.
“The crux of it is: Can you build the pool and sustain the pool?” Saunders said.
Despite the details that need to be solidified, Saunders said that the creativity of the proposal is valuable.
“It has some very positive creative potential,” she said. “But it has some heavy details that need to be worked out.”
According to Hughes, the student debt model has to be changed and “Pay it Forward, Pay it Back” could be the solution.
“The fact of the matter is something has to be done,” he said.