"Pay it Forward, Pay it Back": Oregon's Response to the Student Loan Crisis

Olivia Clifford |

 In response to the July 1 doubling of student loan interest rate, the state of Oregon has proposed a new way to fund college students ever increasing tuition bills. The Oregon Legislature proposed a new method that would allow college students to borrow tuition money with no money down and a fluctuating payment pattern. The new program called the “Pay it Forward, Pay it Back” fund is hoping to be established so that Oregon students can draw from it to pay their tuition and then eventually pay back into it.

 The fund is calling for $9 billion in seed money that they are hoping to borrow with the idea that after time the fund itself will become self sustainable. How the fund would work is that students who had their tuition paid forward, would then pay back annually into a special fund 3 percent of their yearly salaries for a period of 24 years. This allows each borrow to pay the find back in a manner that reflect their current economic state. It’s a new way to bypass the previously established lenders and the now doubled interest charges.

 The Oregon Senate unanimously passed a bill on July 1, the same day that Washington let the current student loan interest rate double to 6.8 percent, to create a committee that is charged with developing a pilot program for this fund. The house immediately followed approving and in 2015 the decision whether or not to implement the fund will be made.

 This proposal originated in Oregon as a product of discussions had by the Economic Opportunity Institute, which is a nonprofit nonpartisan group. The fund closely parallels Australia and the United Kingdom’s income based repayment programs that have been instituted and running successfully internationally for about a decade. With the American student load debt quickly surpassing $1 trillion, other state such as Washington, New York, California, Pennsylvania and Vermont are following behind Oregon and expressing interest in similar proposals. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
TBEVD High Performance Beverages Co n/a n/a n/a n/a

Comments

Emerging Growth

Robix Environmental Technologies Inc.

The Corporation is an "industrial products/technology" company, which has developed an oil spill recovery vessel with the capability to recover oil not only in rough and debris laden sea conditions…

Private Markets

Snapwire

A peer-to-Peer authentic photo marketplace disrupting the $10B commercial photography industry.

BioSculpture Technology, Inc.

BioSculpture Technology, Inc. (“BST”) is a commercial-stage medical device manufacturer of liposuction surgical instruments for surgeons. It offers the FDA-cleared Twin Cannula Assisted Liposuction ("TCAL") Airbrush Liposculptor IIIntellimotion® controllers, Airbrush®…