Under Oregon’s Pay It Forward, Pay It Back plan, students would pay no tuition at state universities – if they agree to pay 3 percent of their earnings for 24 years. Community college students would pay 1.5 percent. The bill tells a state commission to study how to make the idea work. A pilot plan is possible in 2015.
Be wary of no-money-down offers, warns Inside Higher Ed.
It won’t work, argues Sara Goldrick-Rab on Education Optimists. Tuition at the University of Oregon is $9,830 a year, but students would have to pay another $14,000 for room, board, books and supplies. So even those who postpone tuition will have to borrow to pay college costs. Lower-income students still face “sticker shock” that may dissuade them from enrolling.
While Pay It Forward is supposed to be self-sustaining — eventually — the estimates are off, writes Goldrick-Rab. Students will earn less than projected and will resist a 24-year “mortage” on their education. Collecting will require using the IRS.
Students who plan careers in medicine, law, business and engineering will do much better paying the tuition up front, leaving Pay It Forward to collect only from low-paid graduates and dropouts.
It’s a terrible idea, writes Jordan Weissmann in The Atlantic. Advocates say Oregon will need to spend $9 billion over the next 24 years to cover the costs, but that assumes students in high-earning majors won’t opt out. If they know math, they will. Furthermore, “only half of Oregon public college students finish a B.A. within six years.” Dropouts are expected to pay too for whatever years of free tuition they received, but they earn far less and will pay less. “The whole idea could turn into a financial albatross for taxpayers” or a nightmare for former students.