Home » Opinion » Oregon ‘Pay Forward, Pay Back’ plan could open doors for college education in Ohio

Oregon ‘Pay Forward, Pay Back’ plan could open doors for college education in Ohio

Ohio State’s tuition and fees for the 2013-2014 school year will total $10,010 for Ohio residents who are enrolled as full-time students for both semesters, while the out-of-state surcharge will bring that total to $25,726 for nonresident students. Credit: Ritika Shah / Asst. photo editor

Ohio State’s tuition and fees for the 2013-2014 school year will total $10,010 for Ohio residents who are enrolled as full-time students for both semesters, while the out-of-state surcharge will bring that total to $25,726 for nonresident students.
Credit: Ritika Shah / Asst. photo editor

As the demand for college education in the workplace has risen, so have the costs associated with obtaining education. As a result, it has become an inevitable reality for many college students to take out student loans to offset higher costs, only to spend many more years paying them back than they actually spent at a college or university.

It appears that those debts are only going to rise.

The average published tuition and fees for public four-year institutions increased by 4.8 percent from the previous year in 2012-2013, while the inflation-adjusted average annual increase for those same institutions since 2002-2003 has been 5.2 percent, according to data published by the College Board. Meanwhile, the interest rate on new federal subsidized student loans increased from 3.4 percent to 6.8 percent on July 1.

In at least one state, however, a plan is being set in motion to give students a way around those costs.

Earlier this summer, both branches of the Oregon state legislature unanimously voted in favor of a bill which directs the state’s Higher Education Coordinating Commission to consider the creation of a program titled “Pay Forward, Pay Back” which would replace the system of tuition and fees to pay for higher education.

Under the potential program, students would be able to attend public universities and community colleges in the state of Oregon without paying tuition or fees. They would instead sign a binding contract to pay a small, fixed percentage of their post-graduate income back to the state for a specified number of years, which would then be used to fund the program for future students at the state’s public universities.

The bill does not specify what the percentage or term of payment would be, but the Huffington Post, among other outlets, reported that students who attend four-year public universities would pay 3 percent, while two-year school students would pay 1.5 percent, for “about a quarter-century.”

Should the Higher Education Coordinating Commission approve, they have been instructed to submit a proposal for the pilot program to the Legislative Assembly by 2015.

As the cost of college education and the number of students nationwide paying student loan debts have each risen, many have wondered whether university students are getting an adequate return value on the education they are paying for.

The “Pay Forward, Pay Back” program could answer that question.

By having each student pay a fixed percentage of their income rather than a fixed tuition price, how much each student pays would be directly relative to how much money each student makes.

Some have argued that the plan would be unfair to the students who make the most money after graduation. In a column for Bloomberg, Zac Bissonnette argued the program “punishes graduates’ success” and is “too good to be true,” because students whose careers lead to high income would end up having to pay more money than they would by paying standard tuition and fees.

That said, while it may cause a small group of students to pay more, it would help many students receive higher education who could not otherwise afford it.

Another concern about the program is the startup costs it would require of the state. According to the Huffington Post, those startup costs are estimated at $9 billion for Oregon.

The long-term benefit of the program, however, could outweigh that drawback. As students pay back a percentage of their income into the program, the education system could eventually become self-sustaining, as the income percentages being paid forward would cover the costs of incoming students to attend public state universities.

Other states are considering following suit, including the state of Ohio. Two legislators from the Ohio House of Representatives, Robert F. Hagan and Mike Foley, announced in July they would propose similar legislation. According to the Huffington Post, the proposal would require graduates to pay three percent of their income for 24 years.

Ohio State’s tuition and fees for the 2013-2014 school year will total $10,010 for Ohio residents who are enrolled as full-time students for both semesters, while the out-of-state surcharge will bring that total to $25,726 for nonresident students.

If the proposal is successful, however, OSU students may eventually not have to pay upfront costs for tuition and fees. This could make OSU and other public universities a viable option for students, while creating a self-sustaining program that will help pay for Ohio universities to continue building the careers of students through education for years to come.

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