Proposal offers new way to pay for college

Washington students could avoid upfront tuition by committing to paying portion of their future income

Staff writerFebruary 10, 2014 

John Burbank, a Seattle-based liberal policy analyst, had been studying the escalation of college tuition for several years when, in 2012, he hit on a plan to help students complete higher education degrees without going into thousands of dollars of debt.

Frustrated by the state’s disinvestment in higher education — which Burbank calls “a financial and psychological barrier for students” — he proposed that the state charge nothing upfront if students agreed to return a small share of their future income.

Burbank, executive director of the Economic Opportunity Institute, took his idea to Rep. Larry Seaquist, D-Gig Harbor. Seaquist liked the idea, but couldn’t find the money to put it into action.

Students in a Portland State University class studying student debt soon heard about the idea. They liked it so much that they used it as the basis for a semester-long project in fall 2012. Then they went a step further, presenting their project to Oregon state lawmakers, who also took a liking to it.

In 2013, the Oregon Legislature unanimously passed legislation to study what it called the Pay Forward, Pay Back program. The passage in Oregon put the plan in the spotlight, prompting a handful of states to consider similar proposals and drawing interest from Oregon’s congressional delegation. Democratic U.S. Sen. Jeff Merkley proposed legislation for the federal government to provide 90 percent of the program’s funding if the state matches with 10 percent.

After months of national attention, Seaquist has brought the idea back to Washington. He argues that recent tuition hikes, as well as underfunding of the state need grant, should make the proposal a priority.

“We have been seized with the problem of increasing student debt,” Seaquist said. “We’ve still got 32,000 students needing the state need grant.”

House Bill 2720 would create the Pay it Forward program, which would allow students to skip tuition if they sign a contract agreeing to later pay a small percentage of their income for a set number of years. The legislation passed the House Higher Education Committee last week and now awaits action by the House Appropriations Committee.

The bill calls for the Washington Student Achievement Council to select five public high schools to participate in a small-scale initial program. Beginning in 2015, students could enroll in the Pay it Forward program and pay nothing upfront to attend state universities and or colleges.

About two years after they graduate or discontinue a program, students would have to begin repaying the state. The payments, designed to reimburse tuition costs but not charge interest, would fluctuate as the former student’s income rises and falls. Students who attended a state university would pay no more than 5 percent of their annual income, regional colleges 3.5 percent and community and technical colleges no more than 2 percent. Repayment could continue for up to 25 years, depending on the individual’s income level and education costs.

The program would rely on the Legislature setting aside money in a trust account to pay the students’ tuition. State budget analysts say they can’t estimate how much the account would need until they know how many students would enroll. Eventually, money collected from graduates would be put back into the trust to help keep the program going.

Seaquist and a representative from the Economic Opportunity Institute estimate that the program would require $1 million-$2 million in startup costs.

David Slagle, the assistant principal at Clover Park High School in Lakewood, said Seaquist’s proposal would help fill a gap in state financial aid. Many of Slagle’s students either don’t qualify to receive funds from the state need grant or have moved to the state too recently to apply for College Bound, a scholarship that covers the cost of tuition for low-income students who graduate from high school with good grades and remain in good standing in their communities.

“Lots of parents don’t qualify for state need grant, but their salaries are too low to fund the escalating cost of college,” Slagle said. “They’re often priced out.”

But some are wary of the Pay it Forward program.

Chris Mulick, director of state relations at Washington State University, said that adequately funding the state need grant and College Bound programs should take priority.

“I hope the need grant wouldn’t lose out to Pay It Forward,” Mulick said. “Let’s finish what we started.”

Julie Garver, director of government relations at The Evergreen State College, said what is needed is not another form of financial aid but better education about the options already available to students.

“I think there is a lot of misinformation about student loans,” Garver said. “There are things for students to do to pay off their loans if they have financial literacy.”

The Legislature is considering adding more money to the state need grant program as part of its push to give financial aid to students who were brought to the country illegally as children. And supporters of Pay It Forward say their plan would not replace any of the state’s current financial aid programs.

“I do not want this program to replace all of our other need grants or other programs,” said Rep. Larry Haler. “It’s considered another tool in the box for those students who can’t afford (tuition) at this time, and it offers the promise of college and the ability to eventually pay it off and become very productive citizens.”

Haler, a Republican from Richland, has worked with Seaquist and Democratic Rep. Gerry Pollet of Seattle on the legislation. With the average student in Washington taking out more than $23,000 in loans, Pollet said the current model is not working.

“It’s an obstacle to public service and our educational achievement at the same time,” Pollet said.

House Bill 2720 awaits a hearing in the House Appropriations Committee. Even if he’s not successful this year, Seaquist says he will continue working toward his goal of lowering tuition and fundamentally rethinking the issue of financial aid.

“This is one of the tools that we want to put on that spectrum. It’s not for everyone,” Seaquist said. “This is a way to commit the state to more funding.”

Annaliese Davis: 360-943-7240 annaliese.davis@

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