Don’t hold your breath for Oregon’s ‘free’ college tuition plan

by Grace

“Pay it Forward, Pay it Back”,  Oregon’s plan to let students attend college without paying tuition, needs a lot of work before it becomes a viable solution to making higher education more affordable.  First of all, despite the headlines, it’s not “free” tuition.

When an advertisement says “No money down,” an asterisk and some fine print typically follow. And it’s probably wise to look for that.

That seems to be the case with an Oregon proposal that has generated headlines such as “Plan would make tuition free at Oregon colleges,” “Oregon is doing free higher education the right way,” and “Oregon looking to eliminate tuition and loans for higher education students.”

Despite the headlines, the state didn’t suddenly abandon all plans to charge tuition. Last week the Oregon legislature took the first steps toward possibly implementing a plan that would allow public college and university students to forgo upfront tuition payments in exchange for paying a portion of their wages back to their alma mater for about 25 years following graduation. While it may mean no money down, it could still add up to large tuition bills.

One proposal calls for students to agree to pay “3% of their salaries annually for 24 years“.

Don’t hold your breath.

  • It is unlikely to become active for another three to four years at the earliest.  The bill still requires the governor’s signature, and many logistical issues need to be finalized before a possible 2015 pilot program.
  • The budget for implementation has not been approved, a significant hurdle given the current economic climate.
  • The plan faces strong opposition from many critics, particularly those who see it as transferring increased financial responsibility from the taxpayers to individual students.

A myriad of potential problems

Pay it Forward faces a myriad of potential problems.  It does not seem to address the problem of soaring college costs, but only defers payment to some future time of supposedly improved economic conditions.  In particular, with dropout rates approaching 50%, many who leave college without degrees may find it particularly challenging to pay back tuition costs.  There is also concern about how the program can be manipulated, with graduates taking on jobs that pay in cash to escape paying back their debt.  And then there’s the problem how this program would drive away many of Oregon’s strongest students, those with the highest potential to earn financial aid at out-of-state schools.  This would increase the percentage of low-earning participants, creating an imbalance that could threaten the financial stability of the program.

Related:  Oregon’s Very Radical and Very Terrible Plan to Make College ‘Tuition-Free’ (The Atlantic)

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