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July 05, 2013 1:48 PM Oregon’s New Tuition Plan: “Pay It Forward” or Just an Accounting Gimmick?

By Daniel Luzer

Oregon’s new “Pay it Forward” tuition plan, which would “enable students to attend state schools [in Oregon] with no money down… by paying 3% of their salaries… into a special fund annually for 24 years,” has been pretty well received among progressives. Laura Clawson at Daily Kos writes that “such a program would encourage risk-taking and dream-following, with new graduates not starting their working lives saddled with tens of thousands of dollars in debt.”

Several publications suggested that this will make public college “free.” The Washington Post wrote about the plan under the headline “Oregon Plan Would Eliminate Tuition at Public Universities.” The Huffington Post went with “’Pay It Forward’ Plan In Oregon Would Make Tuition Free At State’s Public Universities.”

Is this a little too optimistic, however? Sara Goldrick-Rab, associate professor of educational policy studies and sociology at the University of Wisconsin- Madison, tweeted earler in the week that she was not so impressed:

Plans like Oregon’s only appear democratizing; in fact they entirely privatize funding of #highered - no public collective remains.

While this reaction seems a bit exaggerated to me—the bill to create the “Pay it Forward, Pay it Back” plan says the baseline state support for higher education should increase; “Pay it Forward” just shifts tuition and loans into another place—Goldrick-Rab has a good point.

“Pay it Forward” might be very helpful to real students in the short term. A student writes in a web comment on one news story that “with this plan, college students like myself won’t be leaving Oregon universities with crushing amounts of debt.”

But this policy really only seems progressive. It does nothing to address the fundamental problem, which is that colleges are charging students more and more in tuition every year because the institutions don’t receive enough money from the state to cover costs. That’s why people have “crushing debt.”

Furthermore, by transferring the fees for a college education from indigent high school students to gainfully employed adults, this could eventually allow institutions to hide even more tuition hikes. What happens if the state cuts the edition budget again? Can we take 8 percent of graduates’ salaries? Could we eliminate state funding altogether and just take 30 percent?

This policy might very well be a relief to students, but it’s really only moving further along in the trend of shifting public higher education funding from the public to individual students. In the long run it’s not clear students will benefit.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

Comments

  • Mirabeau on July 06, 2013 10:50 AM:

    The author neglects to examine the real reason for ballooning college tuition rates: ballooning college budgets that are absorbed by a) legions of administrators administrating other administrators, b) capital construction projects of dubious necessity and c) in many cases, overfunded and completely redundant "student life" programs. While it is true that states have slashed support in higher education for recent years, it is unfair to pin the burden wholly on them: universities did not make proper cost adjustments, and instead took advantage of the student loan pyramid scam to enrich themselves.

    Nor, for that matter, does this article address the real reason for exorbitant tuition rates: government interference in the credit markets (and the creation of loans that cannot be defaulted upon) has created a captive market that allows universities to raise tuition rates far above what the market will actually bear. Were government student loans ended, universities would have to lower tuition rates to a more down-to-earth level- otherwise, they'd find themselves without students.