College As Social Insurance

Because it is a social good, and because forcing young people into crippling debt to obtain it is about as economically self-destructive as it gets.

I am much more enthusiastic about this than Erik Loomis, though I appreciate his point about funding.

I have a rather strong objection to the term “pay it forward” that is based entirely upon Kevin Spacey sabotaging his own career by starring in New Agey vehicle after New Agey vehicle in the early to mid 2000s, including one by the name above. However, I have to use the term because of this Oregon bill offering an alternative way of funding higher education:

The Pay It Forward solution offers students access to higher education without debt. Students at public universities and community colleges would pay no tuition up-front. In exchange, they would agree to pay a small percentage of their income (1.5% for community college, or 3% for a 4 year school) for 20 years to “pay forward” the cost of instruction for the next generation of students.

Pay It Forward is a social insurance program, not a loan. Students would have no debt, no interest, and their percentage would never change. Instead, graduates would pay their contribution as a payroll deduction, similarly to how we pay Social Security taxes. This means that their contribution would be a dependable, affordable expense. For example, a recent grad making $30,000 a year would pay $900 a year. Later on, when they make $60,000 a year, they would pay $1,800 per year.

Over time, the Pay It Forward plan will create a stable funding stream for Oregon public higher education. As more students graduate and pay in, the fund will grow, allowing more students to participate. Start-up funding will be needed until the first few generations of students graduate and get into jobs where they can pay it forward. This could come from private grants, or public money. One option would be to start with a pilot program at a specific institution, and expand to others as the program grows.

So I’m more than a little skeptical of bills that don’t actually have funding. But given the collapse of the 20th century structures created to ensure a chance at social mobility, it’s good that people are being creative. I’m really not sure what to think about this and I’m curious about the mechanisms for people to buy in. I’m also curious to see if top earnings don’t get capped so that those who become rich will not have to pay 3% for 20 years. In any case, this is at least worth a discussion here.

We can start with those of us who got our degrees before 1985 admitting that our de minimus tuition at public universities was a massive public subsidy unavailable for the past 20 years, and that we graduated into an economy that still offered good jobs at good pay with good benefits on which we could support ourselves - something else not available since the '80s.