States Turning Tuition World Upside Down

Recently, Oregon was the first state to propose a "Pay it Forward" college tuition plan. While many questions remain on whether the dramatic proposal is valid, that isn't stopping a legislative leader from another part of the country from recommending further study of the concept. NJ.com reports:

Under the plan, New Jersey public colleges could waive tuition and fees for students who pledge to give the state a portion of their salaries after graduation.

In theory, the idea would reduce the amount of loans students take out to go to college.

"When kids are getting out of college, they’re buried in debt," Sweeney said. "It gives another pathway to higher education. As someone who didn’t go to college and recognizes how fortunate I am that things worked out for me, you don’t want to leave things up to luck."

New Jersey’s public colleges have some of the highest tuitions in the nation. For example, the average in-state Rutgers University undergraduate will pay $13,499 in tuition and fees for the 2013-14 school year. Once room and board are added in, the total cost of attending Rutgers will be $25,077 for students living on campus.

New Jersey would not be the first state to explore the idea of delaying tuition payments.

On July 29, the governor of Oregon signed a bill to appoint a commission to study a "Pay it Forward" plan and recommend whether the state should institute a trial program.

Although details have not been finalized, proponents of Oregon’s plan have called for the state to waive tuition for students who agree to pay 3 percent of their incomes over 24 years.

Supporters say the program will help alleviate the nation’s growing student loan problem since many graduates leave college encumbered with tens of thousands of dollars of debt before they ever find their first job.

But critics say the "Pay it Forward" idea has too many holes.

While students would get free tuition and fees while they are in school, they will still have to take out loans to cover the cost of living on or off campus, buying books, paying for transportation and other costs that often account for more than half of the expense of attending college.

It is also unclear if asking students in Oregon to repay 3 percent of their income for a quarter century would cover the cost of running a college or if the schools would have enough cash to operate in the first few years of the program. Critics also questioned whether the state would be able to keep track of the incomes of students who move out of state or out of the country.

Wal-Mart Offers Employees Educational Assistance

A recent New York Times article reported that Wal-Mart will begin working with various educational institutions to help its associates earn college credit. The announcement was made in front of 4,000 invited employees last week at its on-campus arena on Wal-Mart’s Arkansas headquarters. Here are some key points:

  • The university will offer eligible employees 15 percent price reductions on tuition, and Wal-Mart will invest $50 million over three years in other tuition assistance for the employees who participate.
  • The partnership with American Public University, a for-profit school with about 70,000 online students, will allow some Wal-Mart and Sam’s Club employees to earn credits in areas like retail management and logistics for performing their regular jobs.
  • Wal-Mart estimates that about 50 percent of its employees in the United States have a high school diploma or the equivalent but have not earned a college degree. With the average full-time employee being paid $11.75 an hour, it was unclear how many of them will be able to take advantage of the new program.
  • The program will initially allow about 200,000 employees in positions like cashier, department manager and distribution center unloader to accrue credits for training they already receive in their jobs.
  • With the work credits and tuition discount, an associate’s degree for a Wal-Mart or Sam’s Club cashier would cost about $11,700 and a bachelor’s degree about $24,000.
  • Wal-Mart executives said it decided to work with an online university instead of a brick-and-mortar school after surveying more than 32,000 of its employees and learning that most of them wanted the scheduling flexibility afforded by online classes.

Dollar Dilemma for Scholarship Programs

HOPE, "Bright Futures" and "Promise" are the names of three state-based college scholarship programs intended to expand higher education opportunities. Each effort, along with those in other states, may fall victim (at least in part) to a series of fiscal challenges.

It’s a combination of lower funding sources, higher tuition costs and expanding enrollments that are threatening the programs. The "solutions" vary, each with its own set of negative consequences.

Stateline.org has the interesting story, including this excerpt.

One possibility is to reduce the amount of the scholarship. Rather than guaranteeing to cover 100 percent of ever-increasing tuition rates, those states now offer students awards at a flat rate. However, it makes college less affordable for many families and disproportionately affects those with lower incomes.

The other option is to reduce the number of students who are eligible for the scholarships. That, too, has negative side effects. Upping academic standards steers awards toward students who are likely to attend college anyway. And it steers money away from lower-income students, minorities and those who are the first in their families to attend college.

Indiana, by the way, established the Twenty-first Century Scholars Program in 1990 to help students from low- and moderate-income families. In recent years, Gov. Daniels proposed privatizing the Hoosier Lottery and using the proceeds to assist all Hoosier students with at least a portion of their public education expenses. A Department of Justice opinion on such privatization scuttled that idea.

Stake Me: Is Student’s “Crazy” Tuition Idea that Crazy?

Would this idea work? We’re not sure.

But if Mike Seaver can become a televangelist, we figure anything is possible.

At any rate, you have to give a California college student credit for trying. Instead of the traditional loan route, he wanted to sell 2% of his future earnings to an investor in order to pay his college expenses. His effort was halted by eBay’s powers that be, but two education experts say the concept has merit.

What do you think? Could this work or is it a worse idea than when Mike, Eddie and Boner tried to set Mr. Dewitt’s car on fire?