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Cutting the Budget: Higher Ed Pay It Forward
Make higher ed fund itself. It creates enough value to do so.

Editor’s note: This is the eighth in a multi-part series on the budget for the State of Oregon and where possible efficiencies can be found.

It's rare that an opportunity presents itself to save money while at the same time making a policy decision that makes sense.

In 2013, the State of Oregon passed a first-in-the-nation "Pay it Forward" describing a pilot for this kind of higher education tuition plan. They way the plan works is described in the bill itself:

"[I]n lieu of paying tuition or fees, students must sign binding contracts to pay to the State of Oregon or the institution a certain percentage of the student’s annual adjusted gross income upon graduation from the institution for a specified number of years."

The dollar amounts are dizzying. In the 2019-21 biennium, State of Oregon general and lottery fund support for four year colleges was over $1.3 billion and that represents about 18% of the budget for Oregon University programs. The state could rescind the general fund money, and back a bond to create a startup fund for pay-it-forward scholarships. Since the money gets paid back into the fund, the fund is self-sustaining -- or even expanding, if the university manages it well. Ultimately, the fund could be required to do the service on the debt that was taken on to create the fund.

There are several positive aspects of the program:

This program seems to have little downside while at the same time holds great potential for revolutionizing four-year higher education in Oregon. It can also deliver some great budget cuts.

Savings: Up to $1.3 billion biennially

--Staff Reports

Post Date: 2020-07-20 08:00:00Last Update: 2020-07-06 22:31:14

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