Testimony of Sami Alloy, Working Families Party of Oregon, to the Oregon Legislature
I know that by now, I don’t have to tell you that student debt has become a national crisis that is hampering economic recovery, and pricing students out of college. The average Oregon public university senior is graduating with around $26,000 in debt, which, when viewed in a context of high youth unemployment and stagnant wages, is a heavy burden. We now know that graduates are postponing major investments and life decisions such as buying a home or car, or getting married as a result of student debt.
Even more disconcerting is that Oregon is pricing talented students out of the education we need them to have, for their own success, for the health of our economy, and for our state revenue base. Oregon continues to trail the nation in high school graduates who enroll in college. And, this year, for the first time, enrollment at PSU flat-lined instead of increasing. This is not the way we should be headed if we are to meet the governor’s 40-40-20 goals.
This is no longer an issue that only affects the young. According to a report by the National Association of Consumer Bankruptcy Attorneys, student loans to parents have increased by 75% since 2005. Nationally, the average debt per family is $34,000, which, over a standard 10 year repayment plan becomes $50,000. This is an inaccessible price to pay for Oregon working and middle class families. As interest rates on federal student loans are set to double next month unless Congress acts, the problem will go from bad to worse.
This bill gives us the opportunity to create a debt-free higher education pilot-program at the state level, while the federal government fails to take timely and decisive action. Pay it Forward makes it possible to graduate without debt. Unlike the federal Income Based Repayment program, students would not graduate with debt on their credit report as they enter an uncertain job market, hampering their access to equity. The program would be particularly beneficial to middle class families who make too much to receive need based aid, but too little to afford college. And, over time, the program would, together with continued public funding, create a stable and growing funding stream for our public colleges and universities.
This bill has a very low fiscal impact, and when we consider the high cost of student debt, it’s clearly a sound investment.
Given the limited resources that we have, and the scale of the funding crisis for public higher education, we should investments that can benefit students and faculty at our public institutions.
Thanks again for hearing my remarks, and I am willing to answer any questions.