Tuition Free Higher Education at All Oregon Public Universities - well not quite free

Cost: 3% of income for 24 years

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.”

Oregon's New Tuition Plan

Personally I have mixed feelings on this.

It's a step in the right direction, but here is what I see wrong with this.

Let's say that some kid with very little money goes to a community college somewhere, opts for this program (lives at home), graduates and gets a $15 an hour job. Their total Education cost is around 9 to 10 thousand dollars, but will end up paying the state $22,032.

Now let's say they go to a college expecting to stay in school for the long haul, so they opts for this program, but something happens the first semester and has to drop out. The total tuition cost would only be about 3 to 4 thousand (at a state community college), they end up working a well paying job somewhere and in turn gets paid pretty well. Now they are subject to pay that 3 percent for 24 years even though they didn't get a chance to utilize the program. Basically they are now paying the tuition fees of others who (through better circumstances) go to a 4 year school, takes classes that are very expensive. Now let's say that person decides not to work, they contribute nothing, while the one who had to drop out because of certain circumstances is stuck paying the bill.

Another question is whether this transfers to other schools. If you start out at a community college and transfer to a state university, will they now have to pay 6% instead of 3%? What if someone Changes majors and instead of 4 years they go 6.

How about Room and Board?

There are a lot of questions that need to be answered here.

I think it is a good start, but should be fined tuned a bit more.

Originally posted by tw0330


Another question is whether this transfers to other schools. If you start out at a community college and transfer to a state university, will they now have to pay 6% instead of 3%? What if someone Changes majors and instead of 4 years they go 6.

How about Room and Board?

There are a lot of questions that need to be answered here.

I think it is a good start, but should be fined tuned a bit more.

edit on 6-7-2013 by tw0330 because: (no reason given)

Seeing as how they are not even implementing it yet, those questions should be hammered out in the pilot program and hopefully gets implemented in 2015.

One thing to consider this may cause a leap in education among older American's as well as the burden of having to work to pay bills and school would be lifted.

reply to post by benrl


I think you hit it 100% dead on there. I wish wish wish WISH I had done at 21yrs old, what I am doing now. I just faced what you say, right there. How to pay school costs AND pay bills to keep a house running at the same time?

Little did I know the standard student loan package is figured out to be a few times more that school costs, to account for a lower standard of bill and living expenses. Of course, once interest is tallied out, that will be far far more to pay off than 3% for 24 years would have come to.

I'd love to see this program and it sounds fair if the proceeds are truly used as stated and not another addition to "General Funds" of anyone. Education isn't a "I win, you lose" type of thing. It's advancing all of society as a whole and keeping it advanced. Insane examples of curricula aside...It's a net positive for everyone together.

Originally posted by Wrabbit2000
reply to post by benrl

 

I think you hit it 100% dead on there. I wish wish wish WISH I had done at 21yrs old, what I am doing now. I just faced what you say, right there. How to pay school costs AND pay bills to keep a house running at the same time?

Little did I know the standard student loan package is figured out to be a few times more that school costs, to account for a lower standard of bill and living expenses. Of course, once interest is tallied out, that will be far far more to pay off than 3% for 24 years would have come to.

I'd love to see this program and it sounds fair if the proceeds are truly used as stated and not another addition to "General Funds" of anyone. Education isn't a "I win, you lose" type of thing. It's advancing all of society as a whole and keeping it advanced. Insane examples of curricula aside...It's a net positive for everyone together.

Amen wrabbit,

Education is something we all need, someone getting educated who normally wouldn't advances us all.

reply to post by tw0330

The total tuition cost would only be about 3 to 4 thousand (at a state community college), they end up working a well paying job somewhere and in turn gets paid pretty well. Now they are subject to pay that 3 percent for 24 years even though they didn't get a chance to utilize the program.

That same thing would happen with student loans.

But i don't even know if that is what would happen with this program. You don't really seem to know the details of the program. You're basically asking us, and in doing so making the program out to be bad, even though you don't know the answers to the questions.

reply to post by tw0330


I actually find this to be very interesting. I have a student loan, for which I will be paying $800 a month over the next 10 years to repay it (I'm cursed with some LIBOR affected loans but as a note, some federal student loans are currently going up to those same damn rates again). The total amount that I will pay at the end will be over $90k for what was originally $34k in loans. Starting pay for many jobs is around $30k a year. Under the new plan, that would mean that I would have been only paying $900 in the first year of employment post-graduation in comparison to the $9600 that I am paying currently. The first would be doable for a graduate starting out. The second puts them at close to the poverty level.

So, let's say a single individual with a comparable student loan to mine graduates from college. First thing out of their $30k a year salary would be tax. For an individual living in Oregon, that would be around $6700 taken out annually (probably getting a lot back in return but we're looking at livability throughout the year). That brings their income down to $23,300 a year. Now remove the brutal $800 a month financial aid payment and that means that the remaining income for the paying of rents, food and other expenses would be $13,700, which is just $2k higher than the national poverty level. Kind of explains why so many college grads end up living at home with their parents, doesn't it? At the end of 10 years, the total paid towards the student loans will be that aforementioned $96k.

Now, let's take the same individual with the same starting pay of $30,000 a year with a 5% raise per annum (that percentage is actually being cheery because the new standard is apparently 3%). We already know that the first year of payments would be $900 in a lazy way of calculating it. After 10 years, the payment would be $1396. In the final year for a little over $92k salary, it'd be $2764. No poverty level in the first few years for the individual (with $1000+ rents, may still have to live with mom and dad for a bit). Total amount paid towards tuition: 40,052.

Hell of a difference. The former makes the college graduate lose all ******** hope. The latter is hope. My concern is how the universities would stay afloat in the first few years post-implementation but, if they think they can do it, more power to them. I also can name a public university in Oregon that has been acquiring up downtown property so maybe they aren't as financially tight as they like to make voters think.

reply to post by benrl


This is indeed one of the most important step taken by the government but at the same time it will be not fair for some poor students who are spending their whole day in dong some sorts o part time jobs just to earn their livelihood

Originally posted by tycoon
reply to post by benrl

 

This is indeed one of the most important step taken by the government but at the same time it will be not fair for some poor students who are spending their whole day in dong some sorts o part time jobs just to earn their livelihood

...

Not fair how?

They would get free education, while they go to school, they can still work their crappy part time while earning a degree they don't have to pay for.

When they leave they pay 3% a year, no matter how much they make, so if they keep their crappy job they pay 3%, if they get an advanced degree and get a real career they pay 3%.

How is this unfair to poor? it would rise someone out of poverty with a "pay it forward" type of attitude?

This is an excellent plan. Obviously its like scholarships of Canada, which doesnt work for many. But you put aside smaller amount each month into their special plan, that accumulates alot of interest.

So in this way, for once, their ponzy schemes and high interest saving plans, works for the benefit of the student in that their 3% is much smaller than the real amount of income, but the pool of money is making large amounts of interest.

I'd like to see this, for it would be like the scholarship plan in reverse, ie. real time!

Of course, this should have provisions for many different types of students, ie there are students on disability, aged students, not just youths, and also, not all courses have at their heart work time, its best to be a student, when you are doing full courses, otherwise its just dog eat dog survival of the high energy healthy. I like the rest of humanity best. So, wouldn't be expecting employment during university or courses.