November 10, 2013

A smarter way to get smart in Maine? Go to state colleges free, pay later

Two bills propose studying the Pay It Forward approach in which students can attend public colleges for free, then commit part of future incomes to sustain the program.

By Noel K. Gallagher
Staff Writer

Maine is joining more than a dozen states in taking up the latest big idea in college affordability: the “Pay It Forward” model.

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Southern Maine Community College students talk about the idea of a “Pay It Forward” model Thursday in South Portland. From left, they are: Nicholas Gallup of Falmouth, Payton Bourne of Holderness, N.H., and Adeleana Bayreuther of Readfield.

Derek Davis/Staff Photographer

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Harleyanne Hustus, a third-year student majoring in early childhood development, works on her laptop Thursday. She plans to get a bachelor’s from the University of Maine but came to SMCC first because it was less expensive. “Working and interning – it’s a lot,” she said.

Derek Davis/Staff Photographer

First hatched in Oregon, where the governor this summer directed a commission to study the model, Pay It Forward proposes allowing students the option of attending public two- or four-year colleges, tuition-free, in exchange for paying up to 3 percent of their income for about 20 years into a state fund.

While there is much interest and support for the idea, there is no working example of it in practice. Critics and supporters note that the startup costs are considerable – billions of dollars for larger states – and verifying incomes and ensuring proper payments from graduates over a 20-year span pose challenges.

States would likely have to borrow to start the fund, but designers of the plan say it will eventually sustain itself.

Two bills before the Legislature, one sponsored by a Democrat and one by a Republican, suggest that Maine study Oregon’s model and determine if it could work here.

“Pay It Forward is a really out-of-the-box concept born in the state of Oregon and we at least should be taking a very hard look at it,” said Sen. Roger Katz, R-Augusta, who sponsored one of the bills. His bill calls for the Legislature to form a study group and come up with a proposal for a pilot project, perhaps testing the model at a single campus, or limiting it to a certain percentage of students.

“More and more jobs require a college degree, yet college is increasingly becoming out of reach for more Mainers,” said Senate President Justin Alfond, D-Portland, who proposed a similar bill, directing the Legislature’s Education Committee to study Pay It Forward and several other college affordability models. “We need a new approach to make college more affordable.”

The basic concept behind Pay It Forward was created at the Economic Opportunity Institute, a Seattle-based nonprofit. Students in Oregon were studying the idea, invited a state legislator to class to discuss it, and the legislator wound up introducing a bill proposing the study that is currently underway.

Institute Executive Director John Burbank said he’s not surprised at how many states have contacted him with questions about whether the model will work in their states. Since the Oregon legislation was introduced, Burbank said he’s heard from officials in Maine, Vermont, Connecticut, Maryland, New Jersey, Pennsylvania, Illinois, Ohio, Michigan, Washington, Oregon and California about the possibilities for their states.

Soaring tuition, declining state investments and the growing number of students graduating with increasing debt loads have “created huge barriers” to higher education, particularly for the middle class.

“This is a system that is broken and is literally shutting the doors of higher education to a lot of people, or in some way impoverishing them,” Burbank said. “That’s why we needed to find a new way of re-envisioning and re-funding higher education, which can be done through Pay It Forward.”

Burbank compared the overall idea of Pay It Forward to “Social Security in reverse,” with students getting the fixed benefit up front and then paying a portion of earnings over time.

Across the nation, college tuition has skyrocketed in the last two decades, according to the College Board. The average cost at public colleges, including room and board, has increased 20 percent in the last five years to $18,391. As tuition increases, concern about the amount of student debt graduates carry has escalated.

In Maine, 71 percent of college graduates had debt upon graduation in 2011, with the average debt load $26,046, according to the California-based Institute for College Access and Success.

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