A recent bill titled “Pay It Forward” has sprung up in Michigan and is making waves in university systems around the country. The idea behind the bill is simple: Make college more affordable by offering it free of charge.
However, there is no such thing as a free lunch.
The rules are simple: if you can not afford tuition, you can go to school for free and simply pay four percent of your future earnings to the school after graduation. The timeline is based on how long you attend college: Five years of repayment for each year attended. Thus, the average student would be paying four percent of their income for 20 years after attending a four-year university. The bill also states that the rate is only two percent for students attending community college.
Another “catch” is that only students with a household income of $250,000 or below are eligible to participate. Although, this may be altered.
I want to hug whoever came up with this idea. As a fan of incentives, there is no better incentive than a free education. What’s better is you aren’t penalized if you can’t find that dream job right out of college. Whether you plan on flipping burgers or performing brain surgery after you graduate, you still receive a free education and still only pay back four percent of your income regardless of your circumstances.
Some detractors are crying foul over this new bill. They say it does not incentivize students to reach for the big paying jobs since they will have to pay more back. Students who are fortunate enough to have success in the workforce and pay off their balance before the set time have to continue paying until the set time is up. So, success after college seems to work against the student. This logic is ridiculous, though.
Take someone making $50,000 and someone making $250,000 per year. The first person, after 20 years of repayment at four percent (assuming no raises) would have paid $40,000 for their degree. The second person would have paid $200,000. This may seem like a lot, but keep in mind that second person will have made over five million dollars over that 20-year period. I think $10,000 per year would not break their bank anytime soon.
The best part for the high earners and low earners alike is that it’s as fair as it can possibly get. The high earners won’t feel cheated out of money since the rates are the same. Further, the schools win because they will be receiving payments directly from alumni each year to help fund the college.
It will be a great day on campuses everywhere when students are no longer slaves to the student loan companies. Rather, they will be debt free and have a great opportunity to find a job that pays well.
This Pay It Forward bill is an amazing step in the right direction, and we as college students should get behind it and support it. Before long, this option may pop up in other states, even Georgia. While it won’t be here before most of us graduate, we can still look forward to a bright future for other students, and even our own kids one day.
