Sunday, July 7, 2013

Oregon Legislature Approves Tuition-Free College Plan

Congress has allowed student loan interest rates to double from 6.8 percent from 3.4 percent, as Republicans resisted Democratic provisions to extend the lower rate for one year. As an alternative, the Oregon Legislature has approved a plan that would enable students to avoid crushing debt by attending college without tuition or loans and repaying the state later:

This week, the Oregon Legislature approved a plan that could allow students to attend state colleges without paying tuition or taking out traditional loans. Instead, they would commit a small percentage of their future incomes to repaying the state; those who earn very little would pay very little.

The proposal faces a series of procedural and practical hurdles and will not go into effect for at least a few years, but it could point to a new direction in the long-running debate over how to cope with the rising cost of higher education....

...Lawmakers held hearings on the plan, debated amendments, and passed it, with the final vote taking place Monday in the State Senate. The Legislature’s majorities are Democratic — as is the governor, John Kitzhaber — but the vote in both houses was unanimous. An aide to the governor said Mr. Kitzhaber was likely to sign the bill.

...The bill instructs the state’s Higher Education Coordinating Commission to design a pilot program, which would then require the Legislature’s approval. For now, only the broadest outlines are clear.

The idea calls for the state to provide some money to get the program running — how much would depend on how big the pilot is — but that in the future, payments from former students would sustain it. The plan’s supporters have estimated that for it to work, the state would have to take about 3 percent of a former student’s earnings for 20 years, in the case of someone who earned a bachelor’s degree.

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