Search Google Appliance


The Oregonian: Oregon's tuition-free "Pay It Forward" college finance plan would cost state up to $20 million a year
Author: Betsy Hammond
Posted: June 16, 2014

Read the original article in The Oregonian here.

If Oregon were to allow 4,000 college students to attend community college or a public university tuition-free with the understanding that they will repay a portion of their income later, it would cost the state an additional $5 million to $20 million a year for about 20 years, officials said Wednesday.

The motivation behind Oregon's high-profile "Pay It Forward" proposal, initially pitched by a group of Portland State University students, is that more students would go to college and earn degrees if they did not have to take on debt to cover tuition and fees. (Students still would have to find a way to pay for room, board and books but could use any federal financial aid or scholarships they managed to come up with.)

Such a program eventually could be self-sustaining if participating students agree to repay about 3 to 5 percent of their post-college income over 20 years, according to those who have worked out how the program could operate.

But in the 22 years before that, the state would have to pay the tuition costs not covered by graduates' two-decade-long repayments, designers told a key state committee Wednesday. And those costs to state taxpayers would be significant.

If Oregon were to allow 1,000 students a year to start college on a tuition-free path in fall 2016, 2017, 2018 and 2019, and then allow them to complete as much undergraduate work as they can on that same tuition-free deal, the state would have to pay $6.5 million in the first year, $20 million at the peak in 2020 and amounts between those figures over 20 years, officials said.

"I feel an obligation to give this serious consideration," Tim Nesbitt, head of the Oregon Higher Education Coordinating Commission, said Wednesday.

He said giving more need-based state financial aid, giving more money directly to community colleges and universities, and offering two years of free community college also are options.

Ben Cannon said the commission will make clear by August whether its members think minimizing tuition increases, expanding state financial aid, pursuing a Pay It Forward approach or other options are best for Oregon and its college students.

If a Pay It Forward pilot program were to launch in fall 2016, students would be allowed to choose whether they wish to take part and, if more than 1,000 sign up, participants would likely be chosen at random.