Merkley To Unveil New Way To Handle College Student Debts

The Register Guard | Aug. 9, 2013 6:36 p.m. | Updated: Aug. 10, 2013 1:36 a.m.

Contributed By:

Saul Hubbard

When he speaks in Eugene today, U.S. Sen. Jeff Merkley plans to unveil a legislative concept that could provide some federal seed money to an embryonic and radical concept designed to tackle the student debt crisis.

The “Pay It Forward” model would allow students to attend state colleges without paying any tuition up front. Instead, they would commit a small percentage of their future incomes to repaying the state over a couple of decades.

The idea drew national media attention last month after the state Legislature passed a bill to study the feasibility of such a model.

One of the issues that has arisen with the concept is the question of how Oregon, or other states, would find the money to cover the tuition of the first wave of students until enough graduated students start contributing a portion of their incomes to the system.

Merkley’s bill, which he expects to introduce in September, essentially proposes to convert dollars provided now under federal subsidized Stafford loans to those startup costs in a small number of states that want to experiment with “Pay it Forward.” The states would have to cover the remaining initial costs.

The Oregon Democrat said Thursday that, while many of the finer points of his legislation still need to be figured out, he hopes that such a pilot project initially could be used by 50,000 to 100,000 students.

The legislation is being crafted so that it avoids creating any new spending by the federal government, Merkley said, which should give it a better chance of becoming law.

Merkley described “Pay It Forward” as “a powerful alternative tool” to the traditional student debt model and said his legislation would “empower” states to try to see if the concept is workable.

“College debt is a millstone around our kids’ necks,” he said. Debt concern “is stopping other kids from going to college at all.”

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