Oregon's New College Funding Idea: No Money Down

Paying for College
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<p>In these days of tighter state budgets Oregon has come up with a surprising idea to let residents fund a college education at state schools: pay no tuition now, but then pay a share of earnings for 24 years. That sounds like a long time, to be sure, but the proposed percentage is just 3%.</p>

<p>Oregon</a> Explores Novel Way to Fund College: 'Pay It Forward' - WSJ.com</p>

<p>One wonders about "adverse selection" - might music majors and teachers opt in, but future doctors, investment banker wannabes, etc., opt for financing that wouldn't involve open-ended payments? And what about grads who decide to drop out of the workforce if enabled by a high-earning spouse, inheritance, etc.? Still, it's an interesting concept that would avoid some of the problems with crushing debt loads for new grads.</p>

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<p>Too early to tell.</p>

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<p>I think it’s a step in the right direction, but I also think that it’s a pretty big financial risk for the state. Billions of dollars at risk for this plan. Then again, there would be students like me (an Oregon resident and student) who would decide not to enter the plan, and if I did, I wouldn’t be paying over 30k in tuition since I am a community college transfer.</p>

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<p>Think of the increase in threads titled “I want to establish Oregon residency”</p>

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<p>If they increased it to 5-6% income and reduced duration to 12-15 years, I’m sure they’d see TONS of applications who’d otherwise go elsewhere.</p>

<p>BTW, this is similar to what Great Britain does and it works.</p>

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<p>Actually colleges in Pennsylvania should do this. Public Universities in Oregon cost less than 10k for tuition.</p>

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<p>At least they are trying to come up with some solutions to make college financing work. This would be great for all those students who say that their parents won’t help them in any way, they would have an option to do it on their own.</p>

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<p>That sounds like a long time, to be sure, but the proposed percentage is just 3%.</p>

<p>they need to put a cap…like 3% but no more than $6k per year or something like that. The person pays whatever is lower.</p>

<p>Once the person moves out of the state of Oregon, how is Oregon know how much the person is earning?</p>

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<p>People have done something similar before. People have applied the bond concept and the stock concept to college funding on the individual level (if anybody really cares I can dig up my info on this), but I don’t know of a school that has tried it as an institution.</p>

<p>It says something about Oregon’s confidence in their graduates to become employed.</p>

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<p>At 3% of my income, it’d take me only 5 years to pay off my current loans, not 24.
This plan breeds teachers and social workers while killing engineers, bankers and consultants.
It also encourages reckless loan taking. I had roughly 10k in debt upon graduation because I worked throughout college and constantly said “no” to myself.</p>

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<p>Bad idea because it’s not enforceable. I’d rather collect the money from parents first then provide service to children later.</p>

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<p>Am I reading this correctly? You would pay 3% of your income for 24 years regardless of your income?</p>

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<p>Oregon state tax rate is about 11% now. I wonder Oregon residents will pay 14% in the future when this law is passed.</p>

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<p>It’s a novel idea that deserves some looking into. </p>

<p>And some people in this thread need to get a clue. The plan would “breed teachers and social workers”? What? People don’t go into those other fields to pay off their loans. They go there oftentimes lately for the paycheck. People go into teaching (typically) because it’s what they want to do. Yeah, this would provide relief to them but it’s not really going to shove more people in the teaching direction (or social work direction for that matter). At the most, it’ll let people who wanted to be in that field go into it because they can worry a little bit less about college costs.</p>

<p>And what’s wrong with being a teacher or social worker, anyway? Oh yeah, nothing unless you’re obsessed with money.</p>

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<p>It’s not a novel idea. </p>

<p>This is basically the same system that is used in many European countries and it was proposed and given some consideration in California either last year or in 2011.</p>

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<p>

They pay back 3% of TUITION, not loans. Had you taken out loans for the entire tuition for four years could you still pay it back in 5 years?</p>

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<p>3bm103, according to the link provided, the payment plan is 3% of SALARY for 24 years in order to pay back the value of the full tuition that was not paid while in school.</p>

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<p>What I think would be a better idea is if the state funded education to the extent that if a student took prescribed courses in high school, ( with suggested GPA) they would be guaranteed admittance to a state university.</p>

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<p>That little article didn’t give a lot of detail, but the answers to some of the questions posters to this thread have asked can be found here in the pilot document developed at UW: <a href=“http://www.eoionline.org/education/reports/PayItForward-Oct12.pdf[/url]”>http://www.eoionline.org/education/reports/PayItForward-Oct12.pdf&lt;/a&gt;&lt;/p&gt;

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<p>Interesting.
the Economic Opportunity institute is seperate from the UW however.</p>