A banner at a protest at Cooper Union in New York City on December 8, 2012. (Courtesy of Flickr.)
At the start of the fall 2012 semester, a group of students gathered in a classroom at Portland State University, just as students in schools around the country were doing. They proceeded to spend the next few months discussing and debating student debt and possible solutions to it, but when the semester ended and the students moved on to other classes, they, unlike most, refused to allow their work to remain an academic concern.
On July 1, the Oregon legislature voted to investigate how to implement a “Pay It Forward, Pay It Back” tuition plan—the very plan that those students had studied, researched and presented to a panel of state legislators, with the help of the Oregon Working Families Party and Jubilee Oregon. Under the Pay It Forward (PIF) plan, students would attend public universities without first paying tuition and, in return, pay a percentage of their income for the next twenty-four years; the aim is to create debt-free higher education.
In the days and weeks after the legislature approved the Pay It Forward bill, numerous states expressed interest in adopting the idea. Oregon is the only state in which legislators have voted on PIF, but politicians in other states are beginning to propose similar bills. In New Jersey, State Senate President Stephen Sweeney announced on August 5 that he and Assemblywoman Celeste Riley will introduce legislation to form a commission to look into implementing PIF in the state’s public universities. Two days later, Pennsylvania State Senator Daylin Leach announced that he plans to do the same, and in Washington State, KUOW.org reports that State Representative Larry Seaquist is considering a PIF proposal for the next legislative session. In Ohio, where the average graduate has over $28,000 in student loan debt, State Representatives Robert F. Hagan and Mike Foley have already taken that first step, proposing a PIF bill on July 17.
The excitement over Pay It Forward is understandable: with over $1 trillion in student debt nationally, people are anxious for action. PIF, while not a solution to the problems of the rising cost of higher education and the defunding of it by governments, is a meaningful immediate step in the right direction for students who are burdened by debt after graduation and facing a youth unemployment rate of 16.2 percent—more than twice the overall unemployment rate in the United States.
Many student debt organizers, however, are hesitant about PIF’s national potential. “I don’t think going for Pay It Forward is a good solution necessarily because it does mask the possibility of tuition increases, or it could,” says Barbara Dudley, a founder of the Oregon Working Families Party and one of the professors at Portland State University who co-taught the course that designed the plan.
Dudley emphasized the vast amount of research into Oregon’s finances and university system that the students conducted before deciding on this specific plan, saying, “It’s not a frivolous choice that was made and it wasn’t done on the spur of the moment. It required that kind of consideration. What I would encourage in any state that’s looking at this is that they do the same kind of examination of the problem, the potential solutions, and they include students in it.”
Some, however, are already wary of the plan: the American Federation of Teachers has come out against PIF, and in New York, the union is worried that it will lead to decreased funding from the state government, according to Stan Altman, a professor at CUNY who is researching the quality of undergraduate education and the role of student debt.
As Dudley acknowledges, Pay It Forward is not without its drawbacks. Because it relies on graduates’ incomes to be sustainable, some worry that it could result in students being pushed towards more commercially lucrative majors and careers or that it could discourage students who plan on pursuing such careers from opting into the program to avoid actively contributing a larger amount of money back into it. Finding the money to fund the system before it becomes self-sustaining is also a challenge, although Oregon Senator Jeff Merkley recently unveiled a plan to redirect money from federal subsidized Stafford loans to PIF’s start-up costs. He expects to introduce a bill outlining his plan, which aims to avoid any new spending by the federal government, in September.
Additionally, critics have noted that high costs of living and expensive books often necessitate loans themselves, meaning that delaying tuition costs until after graduation might not keep students out of debt. Keeping track of students who move out-of-state after graduating could also be problematic. PIF was modeled on Australia’s university system, which has used “income-contingent” loans since 1989, but Australian students who move overseas cease paying back into the system, according to a January 2013 study of Australian higher education by the Grattan Institute.
“It would make more sense for it to be a national program because ultimately administrating the collection of a payroll tax will require cooperation of the IRS as students migrate from the states in which they are educated to the states where they live and work,” explains Altman.
Despite these valid concerns, the appeal of Pay It Forward is clear: it is, after all, one of the first plausible, concrete ideas for how to begin combating the ever-growing problem of student debt. In a country where tuition is rising faster than the rate of inflation and has increased 1,120 percent since 1978, where state and local funding for higher education decreased 7 percent in 2012 and where students graduated with an average of $26,500 in student loans in 2011, a plan to create debt-free higher education is hard to resist.
But whether or not Pay It Forward is the right fit is something that should be examined on a state-by-state basis and, as Dudley stressed, each state needs to involve the people who will be affected and who have first-hand experience dealing with these issues: students. “There are an awful lot of people out there having had the experience of a virtually free education who are not understanding the crisis that’s facing young people right now,” she says, “and they’re speaking for them without speaking to them.”