The Policy Shop: Oregon’s “Pay Forward, Pay Back” Model Could Finally Make College Affordable for All

Having a college degree has become essential for reaching the middle class. Those with a bachelor’s degree or higher now have a 3.8 percent unemployment rate, while those with some college experience have a 6 percent unemployment rate, and high school graduates with no college experience have a 7.6 percent unemployment rate. With numbers like these, it’s not hard to understand why students have borrowed heavily to gain the necessary credentials for a living wage career.

But with a national total of $1.2 trillion in student loan debt, it’s clear that our current higher education funding model isn’t working. Because our system asks students to either pay tuition and fees upfront, or take on interest-based loans, it actually acts more as a barrier to the middle class than an entry point.

Most wealth redistribution isn’t from the rich to the poor; through programs like Social Security, Medicare, and public education, we distribute way more money from working age people to our youth and retired populations – and with much success. But for some reason, we don’t do this with higher education.

That’s where Oregon’s “Pay Forward, Pay Back” model comes in. Earlier this summer, Oregon’s legislature passed a bill that calls on its higher education commission to study a pilot program that would erase upfront tuition and fees, instead contractually mandating its students to pay a small percentage of their income for several decades. In other words, because college students don’t have the income needed to pay upfront costs, Oregon is looking at allowing students to pay for college when they actually have a way to do so.

In Maryland, we tend to think we’ve come a long way on making college more affordable – in fact, we rank above every other state in the country in keeping down tuition and fees costs at four-year public universities since 2008 (nothing to sneeze at during a recession). But our ranking relative to other states doesn’t make our colleges affordable for Maryland families. For instance, the University System of Maryland meets just 57 percent of its students’ financial need, which is actually down from previous years. So while we may have made the best of a failing system, college is still getting less affordable for our students. Considering the increasingly high costs of delivering higher education, we should take a close look at the Oregon model to see what we can learn from their pioneering approach, or else the college “middle-class barrier” is just going to get harder and harder for our students to jump.  

"The Policy Shop" is a Mizeur Campaign blog series examining policy ideas from around the country that could address challenges facing Maryland.