Pay Forward, Pay Back


By J. Christopher Proctor

The state of Oregon drew the attention of the national higher education community this summer when its legislature unanimously voted to set the wheels in motion for exploring an income based repayment system called ‘Pay Forward, Pay Back’ to replace tuition at public state universities. The idea is still far from going into effect—the measure passed was a roughly one page bill that simply called for a committee to design “a proposed pilot program” to be submitted to the assembly for approval during the next legislative session, leaving almost no details as to the specifics for the program. But despite its infant state, the measure has generated a massive outpouring of media attention, spawning a series on student loans and higher education in both the New York Times and the Washington Post.  

The general idea behind the proposal is that instead of paying large tuition bills upfront, Oregon students would instead commit to paying a fixed percentage of their income for a specified number of years, say three percent for twenty-four years, a rough number being floated around. While a large amount of capital would be needed to start the project, most estimates for Oregon hover around $9 billion. After about two decades this original money could be made back, leaving a self-sustaining fund for future generations. 

Although the details are still forthcoming, the idea of an income based repayment scheme for American higher education has produced a robust debate that has seemingly avoided some of the paralyzing partisanship seen on so many other issues. The progressive nature of the program—low income students are able to attend college without having money upfront or fearing crippling debt and students making more money after graduation end up paying more—has enticed many liberals, while Oregon conservatives reported liking the contractual nature of the arrangement, comparing it to a social insurance program that protects against the threat of low pay or unemployment for graduates. It also provides incentives for students wishing to enter fields that may be socially beneficial but low paying, like teaching or social work, as their college costs would be in a percentage of income rather than a large lump sum to be paid down regardless of income. 

But, despite the widespread interest in the project, many criticisms have arisen about the effects of this type of arrangement. One line of argument points out that as this plan would only cover tuition, students would still face other costs of attendance like room, board, and books, which can often be higher than tuition when taken together. Because of this, student debt would still be a substantial problem. There have also been fears that this system would cause students planning to go into fields with relatively high wages, such as engineering, to pick private or out of state schools to avoid paying more for tuition than their liberal arts counterparts. This problem if realized on a large scale could destabilize the system, as fewer higher income students would be around to subsidize their lower income colleagues. There have also been fears that instituting this type of program would weaken other reform movements in higher education without addressing core problems like rising costs and declining government financial support for colleges and universities. 

Despite these disagreements, many in the higher education community are just happy that the issue is finally getting discussed in the national spotlight. David Rigsby, Athletic Director and Phi Beta Kappa chapter president at Willamette University in Salem, Oregon, said that he was “proud that Oregon is taking a leadership role in the national discourse on the affordability of higher education” and thought that “at a minimum, Oregon has advanced the conversation and provided a platform for educators, policy makers, and government leaders to continue working on this important topic.” Likewise, Patricia Alley, the secretary-treasurer for Willamette’s ΦBK chapter, said that despite practical concerns about the “huge amount of tracking” required to make the system function, she and the rest of “Oregon are watching the process unfold with eagerness.”

The rest of the nation should be watching as well. Proposals are popping up in other statehouses around the country including Washington, Ohio, and New Jersey. Oregon Senator Jeff Merkley has proposed a national pilot program for the Pay Forward, Pay Back idea that would use funds already allocated for student loans and would operate in multiple states and include up to 100,000 students. While this program might not be the magic bullet for solving our higher education problems, the dynamic dialogue it has created is much welcomed and the higher education community would be wise to watch closely as a success in Oregon could have profound implications for colleges and universities nationwide.

J.Christopher Proctor is a senior at the University of Tulsa majoring in economics, political science, and history. The University of Tulsa is home to the Beta of Oklahoma chapter of Phi Beta Kappa.