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09/21/2014 12:06 AM
Pennsylvania House of Representatives
http://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20130&cosponId=13165
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MEMORANDUM

Posted: August 12, 2013 10:36 AM
From: Representative Brendan Boyle
To: All House members
Subject: Commission of a Committee to Examine the "Pay It Forward" Higher Education Funding System
 
In the near future I plan to introduce legislation which would commission the creation of a committee to conduct a study to examine the cost and feasibility of implementing a pilot program based on the "Pay It Forward" model proposed in Oregon and several other states. The model would replace traditional tuition based funding of public higher education in Pennsylvania with a dedicated fund derived from the post-graduation earnings of participating students.

A combination of tuition increases and reduced state support for public postsecondary education over several decades has resulted in Pennsylvania’s college graduates shouldering the 2nd highest average student debt level in the country, forcing many graduates to delay starting families, purchasing homes and forgoing many other economically beneficial activities. This depressing effect on consumption is often a direct result of high monthly student loan payments, and is detrimental to the long term health of our state economy. In other cases, students forgo college altogether due to cost concerns, despite evidence showing that college graduates and those who enroll in college programs but never graduate garner significantly higher income over the course of their careers.

Under the Pay It Forward model, students would contribute a fixed percentage of their post-graduation income to a dedicated higher education fund for a predetermined period of time. The amount contributed would be a fixed percentage of students’ gross income and would be on a graduated scale, ensuring that students who do not complete their course of study would only be financially responsible for the time they attended. Over several years, this fund would become self-sustaining, allowing for tuition to be eliminated at public colleges in favor of financial support from the higher education fund.

By placing a limit on the amount students pay upon graduation toward the state higher education fund, new graduates wouldn’t be burdened with excessively high monthly student loan payments, and would be able to commit greater amounts of their income to economically beneficial activities that are often displaced by student debt obligations. This would stimulate demand for a variety of consumer goods and other services across the Commonwealth, creating jobs and helping to grow our state economy.

The committee would conduct its analysis and produce a comprehensive report, including cost projections for the implementation of a pilot program, as well as the potential adoption of the Pay It Forward model at all 14 Pennsylvania State System of Higher Education (PASSHE) and 4 state related colleges and universities. The report, to be published for consideration by the General Assembly and the public, would be used to determine the feasibility of future legislation to implement a Pay It Forward style funding system across Pennsylvania’s public colleges and universities.

Please join me in supporting this legislation and working to advance a substantive discussion to promote college accessibility and reduce the burden of student loan debt on Pennsylvania students and families.


Introduced as HR429