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July 10, 2013

Socialism and Post-Secondary Education

Patrick W. Allen

Student debt has become such a burden on students just graduating from college that out-of-the-box thinking is needed to help students become successful and productive upon leaving college.


Several weeks ago, I took on the daunting task of explaining socialism to a right-wing readership. Informed by some that educating the right-wing would be an act of futility, the task was undertaken nevertheless.


Invariably, any time a Democrat has a conversation with a Republican, the dreaded word "socialism" surfaces. To see a Republican go into fits and animate their side of the discussion, simply say to them, "All socialism isn't bad."


As noted previously, there are very good examples of where a socialistic policy approach provides great benefit to all citizens, such as:


Example One – American style capitalistic program for college: If you pay (average) $20,000 annually for four years of college, which will total $80,000 + interest for student loans. The interest you would owe could easily total or exceed the $80,000 you originally borrowed, which means your degree could cost in excess of $100,000.


Example Two – European style social program for college: Your college classes are paid for through government taxes. When you graduate from that college and begin your career, you also start paying an extra tax for fellow citizens to attend college.


Question – You might be thinking how is that fair? If you’re no longer attending college, why would you want to help everyone else pay for their college degree?


Answer – Every working citizen pays a tax that is equivalent to say, $20 monthly. If you work for 40 years and then retire, you will have paid $9,600 into the social college program. So, you could say that your degree ends up costing only $9,600. When everyone pools their money together and the program is non-profit, the price goes down tremendously. This allows you to keep more of your hard earned cash!


So, next time you hear Republicans decry that “socialism” and “spreading the wealth” undermines the foundation of our nation, understand that this is a serious misconception and misguided thinking.


Oregon has come up with a plan to help provide higher education for free at their seven state universities. Advocates of the legislation are calling it the “Pay It Forward” model. Somewhat analogous to the framework of Social Security’s pay now and use later approach, opponents of the plan call it unbridled socialism.


Oregon’s post-secondary education students will be able to initially attend state universities free of cost. Upon graduating students will pay 3 percent of their paycheck for 24 years in order to help fund the program for future students. The model is partially based on the Australian model which has been fairly successful. Students will be able to enter college without the fear of being buried in debt by the time they graduate. Currently students who attend universities in Oregon graduate with an average of $24,616 dollars in debt.


The bill passed the Oregon legislature unanimously on July 1st, ironically the same day that interest on federal subsidized Stafford Loans doubled from 3.4 percent to 6.8 percent. The bill is expected to be signed into law by Gov. John Kitzaber before the end of July.


The legislation directs the state’s Higher Education Coordination Commission to develop a Pay It Forward pilot project set to launch by 2015. The bill also requires the commission to analyze whether the state can promise students that their tuition won’t increase during their four-year tenure in a state college.


The biggest obstacle revolves around funding the initial program which will amount to $9 billion. Since the first year of students won’t graduate for several years, the committee must find a way to help fund the program. However, since it appears everyone is on board with the plan, concessions are expected to be made in order to achieve the planned goal.


Student debt has become a burden on students just graduating from college. Oregon’s plan to help alleviate this burden is the kind of out-of-the-box thinking needed in order to help students become successful and productive upon leaving college. Student loan debt is now the largest source of debt aside of mortgage debt. Steve Hughes, the state director of the Oregon Working Family Party said:


We need to fundamentally alter how we think about education. This is the first step to doing it. We need to start down the path because what we’re doing right now is absolutely crazy, and it’s not only bad for graduates and students, but it’s bad for the economy. The advantage is, all (payments are) going to the cost of the program. What we were really trying to get at is eliminate the role that banks are playing in charging interest and fees to students.”


Oregon will become the first state to implement the Pay it Forward program.  Students can only hope that plans similar to these will spread to other states in order to help relieve the burden of student debt across America.


This is the first step to empower the future middle class of America.  Finally a state has the right idea when it comes to helping students. Although this plan isn’t considered a silver bullet, it sure is a step in the right direction.




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