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HB2662 Pay It Forward program

5/7/2015

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Public Hearing Scheduled
Monday May 11th 1:00PM HR A
 
House Committee On Higher Education, Innovation, and Workforce Development

Vice-Chair Representative Joe Gallegos
Member Representative Cedric Hayden
Member Representative Mark Johnson
Member Representative Caddy McKeown
Member Representative Mike Nearman
Chair Representative Tobias Read
Member Representative Jeff Reardon
Vice-Chair Representative Gene Whisnant
Member Representative Jennifer Williamson

If able please attend in person for public record or
send testimony to:  lro.exhibits@state.or.us 
include your Legislators Find them here
TEXT Here   PublishedTTV

HB2662 establishes a "Pay it Forward" program which would provide approved applicants funding to cover tuition and other costs relating to their education. Applicants who are accepted in this program will have to repay to the institution a percentage of their "adjusted gross income." "The Commission may choose to vary the proportion of income paid by each participant, or the method or duration of payment, based on different levels and durations of participation in the program." There is no history to show that this type of program will be sustainable or be a responsible way to help students fund their education.

Personal Choice
This bill amounts to a huge student loan program with no interest required on that "loan." There is no indication that funds will be repaid at a rate to sustain this program in the future. Taxpayer will have to carry the load of the "up-front" moneys (bond) to initiate the program. The bill has a number of "may" clauses which leave a number of options to be resolved by the Commission and they appear to leave the door open for different interpretations for different applicants. There are now many loan, grant and scholarship programs available to students. We certainly do not need to create a new program which may prove to be unfair and non-sustainable.
Fiscal Responsiblity
Fiscal responsibility should begin by controlling rapidly escalating cost in intuition and other related costs in higher education. This new program will only add to the problem by creating "easy" money up front and it will help burden graduates with long-term repayment schedules and obligations. Also, it is unfair to taxpayers who have to bear the load of the initial funding of the program and perhaps have to carry the load of an unfunded or under-funded program in the future. This is not a reasonable or responsible program to solve the high costs of higher education. Also, after graduation, students may well be employed by a low wage employer or a charitable organization. The amount of moneys collected based on one's "adjusted gross income" will do little to re-fund this program. Also, the required pay-back is for a limited number of years and will not necessarily return the totality of the loan amount. This is a very fiscally irresponsible bill.
Limited Government
This bill will create a whole new and expensive bureaucracy to oversee the program, from the applicant selection process up front to the verification and the collection process on the back end of the program. The bill is poorly written and leaves many decisions to be made by the personnel running the system. The collection process will involve the Internal Revenue Service and the Department of Revenue. When there is non-payment a collection agency may be involved to secure the required funds. This is a bureaucratic nightmare of a bill.
Local Control
HB2662 creates, as just indicated, a major involvement of various agencies. Collection and oversight may well involve agencies from numerous states, should the applicant choose to take on employment somewhere beyond the state of Oregon, or abroad.
Free Markets
This bill does not meet the concept of free markets at all. It is simply more government sponsored intervention in the higher education process which generally leads to higher over-all costs for the consumer and the taxpayer. Just take a look at the loan program for higher education at the federal level. Tuition costs have skyrocketed and student indebtedness has reach an astronomical 1.2 trillion dollars
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