Oregon Proposes Innovative Student Loan Repayment Program
With the average college graduate now carrying over $35,000 in student loans, states and financial aid providers are having to look for creative ways to help young adults combat these costs. The State of Oregon has a new model of loan repayment based on investment, income and a little bit of optimism. It could revolutionize the student loan industry.
Rather than paying back their loans over the course of 30 years, students attend college without paying tuition. But they commit 3% of their income for the first 25 years of their careers to pay back this investment in their education.
If the money they pay back is less than the cost of their tuition, they will not have any additional debt. If the money they put in is more than what they paid, the state will have a way to make up for less successful students. Future multi-millionaires will cover the costs for starving artists and public servants, and the state may end up with extra money to use toward the educational system.
If things go according to plan, Oregon will launch its “Pay It Forward” student loan program in the next few years. This is supposed to give students more incentive to attend college, knowing that they are not confined to high payments in low paying jobs. While there are some kinks left to work out, many researchers predict this to be a step in the right direction. Stay tuned to see if that is the case.