The wires and feeds and blogs have been bubbling for more than a week. Maybe Oregon has found it, they say, the solution to our horribly broken and doomed system of paying for higher education. Free tuition! Debt-free graduates! Universities without financial worry. It’s radical. It’s progressive. It must be good.
Alas, if only such miracles were possible. It didn’t take long for the realists to look at Oregon and say, nice try, but it won’t work.
Actually, Oregon is only thinking about trying something radical. The Legislature passed a measure to have its Higher Education Coordinating Commission design a college tuition pilot program based on a plan called Pay It Forward. Depending on who’s talking, the idea comes either from the musings of free-market hero Milton Friedman, or Seattle’s Economic Opportunity Institute, or students in California or Oregon, but this is the basic idea: Students at colleges and universities pay no tuition while in school, nothing up front. Instead, their tuition is paid from a trust fund. Upon graduation the students pledge to pay a fixed percentage of their adjusted gross income back to the trust fund to pay the tuition of future students. It might be, say, 3 percent for 24 years. Someone pays for you, then you pay for someone — Pay It Forward.
When a year in a minimum wage job won’t pay for a year at the university, you can see why this idea has such appeal. It can make college “truly affordable and accessible to all,” says the Economic Policy Institute. “ … After the transition to Pay It Forward is complete, the system is not only entirely self-financing — it also supports successive net increases in college enrollment, making higher eduction both more affordable and accessible for succeeding generations of students,” EOI analysts said. Students could use need-based grants to pay living expenses. They could choose their field of study based on their interests, not on the potential post-graduate income needed to pay debts, EOI said.
“It’s bold. It sounds progressive. And if implemented, it could be a boondoggle,” said Jordan Weissmann of The Atlantic, in a post headlined “Oregon’s Very Radical and Very Terrible Plan to Make College ‘Tuition Free’.” He links to an analysis by the University of Wisconsin’s Sara Goldrick-Rab in The Century Foundation.
To begin, Goldrick-Rab says, the plan “is probably not feasible.” It would require a huge up-front investment to prime the trust fund, perhaps $9 billion for a small state like Oregon. Then the state would have to find a way to collect regular Pay It Forward payments from tens of thousands of graduates for most of their working lives, wherever they may be. Such bureaucracies are not easy or cheap.
Then, it won’t reduce student debt much. Tuition is only 40 percent of the cost of attending a university. Most students don’t get help from need-based aid, like federal Pell Grants. Shelter, food, books and expenses are daunting. Students will borrow to pay for them.
And there are the perverse incentives. Students who graduate to high-paying jobs and professions will pay far more for their degree, and will have a good reason to skip out on the public university and attend a private institution offering a traditional pay-it-now tuition plan. Lose those people and you deal the Pay It Forward plan an actuarial blow from which it may not recover.
Be clear on what the plan means. It won’t make college tuition-free, just tuition delayed. It won’t make college debt-free for all, but debt-free for some. Pay It Forward’s requirement is not a debt, proponent’s say. No, not a “debt,” just an obligation to pay 3 percent of your income for most of your career.
This diverts our attention, says Goldrick-Rab. “The most important reason to reject Pay It Forward is that the plan’s approach distracts from the pursuit of a more effective solution that could benefit all Americans,” she wrote. It weakens the cry for change. It provides cover for those who would cut public investment in higher education. It is not the miracle we have been waiting for.
Tracy Warner’s column appears Thursdays and Fridays. He can be reached at firstname.lastname@example.org or 665-1163.