New bills in Legislature address debt, tuition

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Three bills are making their way through the Oregon Legislature this session and have provoked an earnest discussion about the future of higher education in the state.

House bills 2838, 3025 and 3472 are in various stages of negotiation and offer new ways of approaching the question of education funding in Oregon.

Here is a breakdown of the three bills.

“Pay it forward”

HB 2838 seeks to establish a pilot program in Oregon, which, if successful, would enable in-state students to enroll at participating academic institutions without paying tuition or fees—these costs would instead be paid by the state.

According to the text of the bill, students would enter into binding contracts with the state or their institution to repay a certain percentage of their adjusted gross income for a specified number of years after leaving school, with payments going into a fund that would finance the education of subsequent generations of students. The fund would require state backing early on but would grow to self-sufficiency within 25 years.

The bill is the product of a Portland State senior capstone course taught in fall of 2012 by professors Barbara Dudley and Mary King. According to King, one of the course’s early priorities was to identify “good new policies both on the federal and state level to deal with the student debt crisis.”

The class identified and adopted a plan drafted by the Economic Opportunity Institute in Washington called Pay It Forward. They adjusted the program’s details to suit Oregon’s numbers with help from the institute’s John Burbank and Jason Gettel, a policy analyst at the Oregon Center for Public Policy.

The bill has been well-received thus far, and has seen support from PSU’s chapter of the American Association of University Professors as well as PSU President Wim Wiewel. In testimony submitted to the bill’s second public hearing on April 3, Wiewel called the plan “an intriguing idea because it addresses a problem that threatens the affordability and accessibility of a college education.” That problem, he continued, is student debt, and the bill’s designers and backers insist that Pay It Forward doesn’t simply rearrange the terms of debt for students.

“You’re not taking [on] debt by going through Pay It Forward,” said Tracy Gibbs, who recently graduated from PSU with a degree in economics and was enrolled in Dudley and King’s capstone course. “The student, when they graduate, is coming out in the black.”

This, according to Gibbs, means that new graduates would have greater flexibility to pursue careers that they were interested in as well as various kinds of investments like buying a home and contributing to retirement funds.

The bill also has support in Salem.

“Education is hugely valuable,” said Rep. Chris Harker, D-Washington County, vice chair of the House Committee on Higher Education and Workforce Development, where the three bills were being heard earlier this month. “But it shouldn’t be hugely expensive.”

Bachelor’s and associate’s degrees would demand different repayment rates, which wouldn’t be collected from students until they found employment. “When you get [a] job, then you will pay the 3 percent that you had for your public university education or your 1.5 percent from your two-year associate’s degree,” Gibbs said.

The bill has gone through two public hearings since February, and during a recent work session was slated for a merger with another bill, House Bill 3472.

Looking into a tuition freeze

HB 3472 would commission a study to investigate the impact of a tuition freeze at Oregon’s public universities through an investigation of other programs already in place regionally and nationally. Both pieces of legislation are exploratory in scope and preliminary in nature, and both declare the existence of an emergency, which means the acts would take effect immediately upon passing. Nonemergency legislation goes into effect 91 days after passage.

“It just made sense to merge the two bills,” said Lindsey O’Brien, interim communications director at the House majority office in Salem.

In 2007, Western Oregon University implemented a tuition freeze program called the Western Tuition Promise, which offers to lock in tuition rates for incoming freshmen who are U.S. citizens or permanent residents at the institution for four years—effectively protecting students from rises in tuition.

In testimony given at an April 5 public hearing, WOU Associate Provost David McDonald warned that this policy, which only allows for tuition to be raised for one class of students at a time, “limits the degree of freedom that the university has in the face of declining state funding,” adding that the program’s viability has recently come into question.

Estate tax funds may go to education

A third bill being considered in the House is HB 3025. According to the text of the bill, revenue generated from Oregon’s estate tax would be divided into thirds and dispersed to the Oregon University System for higher education funding, the Department of Education for funding early childhood education programs and to the Community College Support Fund.

Rep. Chris Gorsek, D-Troutdale, one of HB 3025’s chief co-sponsors, said in testimony at the bill’s public hearing on March 13 that “since the beginning of the recession, college enrollment has jumped over 30 percent while state funding has dropped by 20 percent…Needless to say, our higher education system is in need of stable and increased funding.”

The motion encountered opposition at an April 5 work session, with concerns being raised about the validity of the estate tax as well as worries that passage would allow for further cuts to higher education in other areas. The motion survived a committee vote, however, and was subsequently referred to the Joint Committee on Ways and Means, where it awaits further scheduling.