Study Now, Pay Later: Oregon Legislature Adopts New Tuition Plan
So, how much is a college education worth? The U.S. Bureau of Labor Statistics reports individuals with just a high school diploma are almost twice as likely to be unemployed as those with a bachelor’s degree. Furthermore, those with four-year degrees earn, on average, more than one-third as much as adults with no college degree or certificate. That amounts to more than $400 per week, or, looked at another way, approximately $900,000 more over a lifetime in today’s dollars.
Still, not everyone with a bachelor’s degree earns the same income. Take two adults, for instance, five years out of college. Both spent the same amount on tuition to a public, four-year university. One, however, earns $75,000 per year while the other makes only $30,000 per year. Was the investment of equal value to both inviduals?
In Oregon the legislature recently approved House Bill 3472 which paves the way for students to have the option to base their college tuition on a percentage of their future incomes. Those who earn very little would pay very little; those who make high salaries would pay more. Students committing to pay their tuition through this program would pay no tuition up front, nor would they have to take out traditional student loans. It's something of a gamble. Students could wind up repaying significantly more or significantly less under this system than if they paid a set, pre-determined tuition rate.
Some have dubbed the measure, "Pay it Forward; Pay it Back." It would create a fund that students would draw from and eventually pay back into. The bill calls on the state Higher Education Coordinating Commission to design a pilot program which would require the legislature’s approval. It does not stipulate the percentage of future earnings to be repaid, nor the length of time they would be required to pay a share of their income. Those decisions are to be determined. Reportedly, authorities are considering a pilot program that would require students to repay 3 percent of their income for 24 years.
According to The New York Times, the genesis for the legislation came from a class at Portland State University called “Student Debt: Economics, Policy and Advocacy.” Students and their instructor made a presentation to the Oregon legislature, including Rep. Michael Dembrow, chair of the Higher Education Committee. Legislators took the idea and ran with it.