Pay It Forward: Innovative Oregon Proposal Could Solve Problem of Student Loan Debt

By passing a law that covers tuition with a new social insurance program, Oregon politicians hope to create a system where students are able to graduate with no debt and no interest payments

As politicians in Washington continue to ignore the plight of students drowning in student loan debt, a new proposal developed by students in Oregon takes an innovative approach that could alleviate the need for student loans all together.

Under the proposal, referred to as Pay It Forward and lauded by Senator Mark Hass as an example of "out of the box thinking," local students would be able to attend public universities and community colleges in the state for free.

Instead of taking out costly loans, students would enter a social insurance program and pay about 3 percent of their adjusted gross income for graduates of four year programs, or 1.5 percent for two year programs, for a total of 24 years. Students would graduate with no debt, no interest and the percentage of their income they had to pay would never change.  

“As a student who will graduate with over $40,000 in student loan debt, I think that we need creative solutions like Pay It Forward. It will eliminate the initial barrier to attend college, and students won’t be burdened with a crushing debt for the rest of their lives,” said Alexandra Flores-Quilty, a junior at University of Oregon.

After passing in the Oregon House last week, the proposal was unanimously passed in the Oregon Senate on Monday. If signed into law, the bill would direct the Higher Education Coordinating Commission (HECC) to draft a Pay It Forward pilot program to be considered for implementation by the 2015 legislature.

Initially, the plan would require start-up funding until the first few generations of students graduate and find jobs. But once they're able to begin paying into the system, the proposal would create a stable funding stream for Oregon's public higher education, and could serve as a model for other states looking to solve the problem of long-term student loan debt.

“Students are being priced out of higher education, and fear of debt is pricing them out of majors that we desperately need, said Rep. Michael Dembrow. "I think it's great that the Legislature is taking the problem of student debt so seriously, and I applaud the students who have tirelessly pursued this."

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Rob Tornoe
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