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Maryland legislature considers bill to defer college payment, sp

2015-02-04

The House of Delegates is considering a bill to study a Pay It Forward program that could dramatically change the way students pay for college.

Under a Pay It Forward program, high school graduates would not have to pay any upfront cost to attend college. Instead, they would agree to pay a percentage of their income after graduation for a set number of years. 

In Oregon, which will be the first state to test a pilot of this program in the 2016-17 academic year if it passes an Oregon General Assembly vote this spring, 4,000 randomly selected students will pay between 1.5 and 4 percent of their income for 20 years after they graduate. 

While this bill would only commission the Board of Regents to study the possibility of implementing such a program in this state, the bill’s sponsor said it’s an important first step.

“This state has a lot of untapped potential in students that would be great in college and will be able to come back and really contribute to our economy, but they just can’t afford to go upfront,” Del. Kirill Reznik (D-Montgomery) said. “This program would open up that funnel of opportunity and be able to let anybody who wants to go to college get into college on their merits and succeed in college.” 

Student Government Association President Patrick Ronk testified in favor of the bill at a House appropriations committee hearing Tuesday afternoon.

In addition to taking the financial burden off students and incentivizing universities to equip their students for the workforce, Ronk said that a Pay It Forward program would allow students to choose a field based on their passions and not money.

“The current system of paying for college is unsustainable,” Ronk said in his testimony. “We’ve come to the point where just keeping tuition increases low is not enough. As we say at UMCP, we need to be driven by fearless ideas for a better future and the Pay It Forward Program could be one of those fearless ideas.”

To implement the program, the state would need to make a large initial investment until the revenue generated from graduates’ wages becomes enough to make the program self-sustaining, Reznik said.

University System of Maryland Vice Chancellor P.J. Hogan, who testified in opposition to the bill, estimated it would cost the state about $2 billion.

“We know the state does not have that kind of money, the institutions cannot fund that kind of money,” Hogan said. “It’s a wonderful idea, it’s just not realistic.”

John Burbank, executive director of the Economic Opportunity Institute, developed the Pay It Forward concept and has worked closely with states trying to study and test the program. 

While no states have implemented the program fully, he said 12 are studying it and Oregon is developing a pilot program.

Another version of this bill was proposed in 2014, but died after receiving an unfavorable report in committee.

Burbank, who also testified at Tuesday’s hearing, said Oregon’s pilot program will be funded through lottery revenue. He emphasized that each state is different and can work to find an appropriate funding solution.

One solution he suggested for this state was a slight increase in the estate tax, which is taken from a person’s remaining wealth after they die.

Ultimately, Burbank said, a Pay It Forward program will be self-sustaining and create opportunities for less fortunate individuals to attend college and achieve financial stability.

“It demolishes the psychological and the financial barriers of applying to college,” Burbank said. “It demolishes the sticker price, and that’s really important to get people to access higher education.”

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