Pay It Forward Plan Draws Serious Criticism


July 21, 2014
by Suada Kolovic
When it comes to paying for a college education, it seems as though students have two options: deal with impossibly high payments while they're in school or crippling debt for years afterwards. Well, Oregon students were provided a third option last year when legislators approved the Pay it Forward plan that would allow students to attend state colleges without paying tuition or taking out student loans but would instead commit a small percentage of their future incomes to repaying the state. It turns out, however, that said plan isn't the saving grace for college students afterall.

When it comes to paying for a college education, it seems as though students have two options: deal with impossibly high payments while they're in school or crippling debt for years afterwards. Well, Oregon students were provided a third option last year when legislators approved the Pay it Forward plan that would allow students to attend state colleges without paying tuition or taking out student loans but would instead commit a small percentage of their future incomes to repaying the state. It turns out, however, that said plan isn't the saving grace for college students afterall.

First proposed by students at Portland State University, Pay It Forward has drawn serious criticism since Oregon passed a law to study the idea. According to a report by the American Association of State Colleges and Universities, analysis shows that the plan would leave most graduates deeper in debt than if they had taken out loans and would throw colleges’ balance sheets into uncertainty. Here are some of the more prevalent points in the association’s report but for a more detailed look, click here:

  • Pay It Forward does not account for non-tuition costs like room and board.
  • Students who generally rack up the most debt – those at for-profit and private nonprofit institutions — would not be eligible for the program.
  • The program would have “enormous” start-up costs.

Early estimates suggest that Oregon would have to take about 3 percent of a former student’s earnings for 20 years for it to work. With that being said, what are your thoughts on Pay It Forward? Do you think it’s too soon to tell if this is a viable option for other states to adapt?

College is expensive, Scholarships.com is completely free. Pay for your college education with as much free college scholarship money as possible. By applying to all the awards you qualify for, you can be sure to not miss a single opportunity in paying for your college expenses - including tuition, fees, room and board. Get matched to college scholarships instantly and start applying today by conducting a free college scholarship search at Scholarships.com.

Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



If you can read this, don't touch the following fields


 

Amber B  on  7/21/2014 2:38:24 PM commented:

It sounds good at first after all is said and done this could mean trouble for the participating students. Taking 3% of student earnings could leave the student(s) in a bind because they have other obligations that they need to put their newly earned funds toward. Its an interesting program but rather than have it for all the years the student attends why not have for the first academic year. That way the student can get their bearings and won't have much to pay back to the school. Or better yet have it for a single academic year of the students' choice; since some academic years are more expensive than others.

The U.S. Department of Education will offer a contract to a single loan servicer to manage its $1.2 trillion student loan portfolio, which contains over 43 million borrowers. Instead of keeping its current contract with four different services, the ED will award Navient, GreatNet or the Pennsylvania Higher Education Assistance Agency (PHEAA) the contract. What exactly does this mean for borrowers?

Department of Education Seeking Single Loan Servicer

May 23, 2017 10:23 AM
by Susan Dutca
The U.S. Department of Education will offer a contract to a single loan servicer to manage its $1.2 trillion student loan portfolio, which contains over 43 million borrowers. Instead of keeping its
Roughly half of foster youth graduate high school or receive a high school equivalency diploma by age 19, and less than four percent of foster children earn a bachelor's degree. Getting into college and paying for it is already difficult, so how do foster youth in higher education overcome seemingly impossible obstacles?

Finding Foster Youth College Scholarships on the Web

May 8, 2017 4:27 PM
by Susan Dutca
Roughly half of foster youth graduate high school or receive a high school equivalency diploma by age 19, and less than four percent of foster children earn a bachelor's degree. Getting into college

    May 1st is National College Decision Day! There are so many colleges from which to choose and a lot of students are applying to several schools, some even more than a dozen. Naturally, the cost of college will be a major deciding factor for many of you and continuing to find outside scholarships could be very helpful to most. Students are wary of taking out too many student loans and possibly even forego a more prestigious school in favor for a less expensive college if they fear they won't able to afford the tuition without taking on enormous student debt. One way to avoid doing this and help make college affordable is by applying to free college scholarships. There's no reason you shouldn’t be able to attend your dream college - you still have time to pocket some free college scholarship money before heading off to college!

National Decision Day 2017 College Scholarships

May 1, 2017 4:13 PM
by Susan Dutca
May 1st is National College Decision Day! There are so many colleges from which to choose and a lot of students are applying to several schools, some even more than a dozen. Naturally, the cost

    Being a college student can be daunting, period. With the surplus in coursework, responsibilities and stressing over college debt and expenses, college students are high-anxiety all year round...not just around finals time. On top of that, some student-parents must manage going to, and paying for college while raising and paying for their children. Fortunately, there are great financial aid resources and college scholarships reserved for students who have families; including students with dependent children, single mom scholarships, and single dad scholarships! With Mother's Day right around the corner, indulge in these exclusive free college scholarships- for your accomplishments as a student and mom.

College Scholarships for Moms

April 21, 2017 4:06 PM
by Susan Dutca
Being a college student can be daunting, period. With the surplus in coursework, responsibilities and stressing over college debt and expenses, college students are high-anxiety all year
New York's free college scholarship program is being met with heavy criticism as more details have emerged and it is set to start in fall of 2017. Though lauded for being the first of its kind to offer free college tuition at public colleges and universities, many European countries already offer free college, regardless of family income level...and at the tax payers' expense.

New York Free College Scholarship Program Not So "Free"?

April 18, 2017 11:23 AM
by Susan Dutca
New York's free college scholarship program is being met with heavy criticism as more details have emerged and it is set to start in fall of 2017. Though lauded for being the first of its kind to