Pay it Forward Misses the Mark! Delayed College Tuition Payments are Merely Repackaged Student Debt


In the last 70 years, annual tuition and fee growth at four-year, public colleges has exceeded the rise of inflation. One of the primary reasons for rapid increases in college tuition is the decline in state funding for higher education. This trend of state disinvestment needs to be reversed, and it could be if the federal government, states, and institutions work together to share responsibility for college affordability.

Although some states have been taking a different approach. Legislation has popped up in a number states (Michigan, among the latest) that entices students with a sales pitch: zero down on college tuition now and pay it back later. What they leave out is that students may end up paying more back later. Even then, the main problem with these so-called “Pay it Forward” (PIF) proposals are that they don’t address what students really need, which is for the cost of college to be affordable from the outset.

How it works: PIF proposals are generally structured so that students, while enrolled in college, pay no upfront tuition. The catch is that in order to receive delayed tuition while in school, students agree to pay back a percentage of their income (say, 4 percent) after graduation over a defined number of years (say, 25 years). Sounds good? When you look underneath PIF’s rosy exterior, there are a number of flaws with this concept. For starters:

  • PIF only addresses tuition, which is but a slice of the college cost pie. So students may still need to take out loans in order to cover other costs, like books and room and board. At the University of Oregon, for example, additional fees outside of tuition account for almost 60 percent of a student’s total costs to attend college. Students could easily end up having to pay back both loans and PIF taxes after graduation.

  • PIF absolves states and institutions of the responsibility to keep the cost of college down. It moves the responsibility for investing in education from the state and places that burden squarely on the shoulders of students.

  • Because PIF requires that students pay a percentage of their income for a set number of years (regardless of what the actual cost of tuition was), students may end up paying back more than their actual cost of attending college.

  • Low-income students who can’t afford to pay for college now may be the only ones negatively impacted by this plan. Wealthier students who can pay their college tuition upfront will not have to worry about paying back PIF taxes for the two decades, or more, after they graduate.        

  • And lastly, but probably most importantly, PIF does nothing to address or mitigate the rising cost of college.

Despite these shortcomings, the idea is gaining ground. Oregon passed a bill to further study the idea of implementing PIF. Other states, including New Jersey, Pennsylvania, Ohio, and Vermont, have also introduced legislation to study the concept. We are glad these policymakers are concerned about the rising costs of college and are thinking of ways to address the issue. But their proposals must actually address the college affordability crisis as a whole — not simply find a way to spread the high cost of college out over a student’s lifetime.  

Hard working low- and middle-income students should be able to afford college without taking on back-breaking amounts of debt, regardless of the form that debt comes in.

Take the pledge to show your support for state and federal policies that present comprehensive solutions to lowering the rising cost of college and against policies that simply shift costs onto students.

And once you sign the pledge, check out this idea that will actually help to create a debt-free college education for students whose families struggle financially.