A new idea to eliminate student debt gains traction

High student debt is prompting a surge of interest in the "Pay It Forward" plan. Students go to college tuition-free and then pay a small percentage of their income in future years so others can do the same.

SALT LAKE CITY – State cuts in education funding and sharp hikes in tuition in Utah could make a new idea for funding college without student loans worth a look. In the “Pay It Forward, Pay It Back” plan, a student attends college tuition-free – with a contract to pay a small percentage of their wages for up to 25 years after college into a fund for other students to also attend tuition-free.

The idea was proposed by the Economic Opportunity Institute, Seattle. Executive Director John Burbank has been asked to present it to groups across the country as an alternative to mountains of student debt.

“It’s a psychological as well as a financial barrier,” he said, “and this pretty much demolishes those barriers and opens up higher education for all qualified Americans. That’s pretty exciting, and we are really excited that this has gained such interest.”

The toughest challenge is coming up with the seed money for the first generation of “Pay It Forward” students – after that, the plan becomes self-financing, Burbank said.

This month, Oregon became the first state to pass a bill to create a pilot program. The Oregon Working Families Party helped keep the momentum going for that state’s legislation (HB 3472). Campaign manager Sami Alloy was inspired by an image she saw on the Internet.

“It was a graffiti somebody had written that said, ‘What if the cure for cancer lies inside the brain of someone who can’t afford college?’ I think about that all the time,” she said. “Young people are doing worse than their parents did because of the enormous burden of student debt and the unaffordability of higher education.”

College tuition hikes and the recent failure of Congress to stop the interest rate increase on student loans will mean other states will soon consider “Pay It Forward” college funding, Alloy predicts.

A report out this spring said Utah college students pay on average about $1,100 more per year for school than they did at the start of the recession.

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