Citizen's View: Pledge could make education affordable for every Oregonian
There is no shortage of legislative proposals to help kids pay for vocational or college education. The common thread is that nobody knows how to fund them without taking money away from other critical services.
Ive been reflecting on this challenge as I considered entering the race for state treasurer, a position that will soon be vacated by my friend Ted Wheeler. It is a decision I will officially announce Nov. 9.
The problem with politicians is that theyre very generous with other peoples money. On the flip side are the successful entrepreneurs and business people who see a need and find ways to fund it.
The most high profile of such efforts is The Giving Pledge, the brainchild of the Bill and Melinda Gates Foundation and Warren Buffet. The pledge is a commitment from the worlds wealthiest individuals and families to dedicate the majority of their wealth to philanthropies.
The list is impressive, including everyone from Paul Allen to Mark Zuckerberg. Oregon has some wealthy people, too. You can see their names on buildings, athletic fields and theaters. Id like to put their names and the names of other Oregonians on a pledge.
Im proposing the Oregon Giving Pledge, made up of our states most successful individuals and families. It would be a permanent mechanism to provide no-interest loans to students seeking post-secondary education either at a university, community college or professional/technical school. Individuals and families fortunate enough to have achieved success can contribute either for tax credits, tax deductions, a desire to help or all three.
With an initial target of $500 million wisely invested, a 5-percent annual distribution from the fund would provide $25 million a year in no-interest loans to young people in Oregon. Thats enough to send 950 kids to Oregon State University for a full year with tuition, room and board, books and personal expenses.
As these loans are repaid and more pledges obtained, that 5-percent annual distribution will create a growing resource, making post-secondary education more affordable for our children and grandchildren.
Best of all, this doesnt take away from K-12 education or programs the state administers to assist the hungry, elderly, disadvantaged or ill. It would be a voluntary pledge focused on eradicating one of the greatest challenges to our youngest generation the long-term expense of high-interest student loans. And anyone can contribute.
Today, federal undergraduate loan rates are 4.29 percent. Rates from private lenders are much higher. With the average student in Oregon leaving school with about $25,500 in debt, theyll pay close to $32,000 for the next 10 years. And thats with the lowest interest rate available.
Imagine your kids or grandkids getting out from under their school debt faster and getting on with their lives because they had a zero-interest loan. Its a simple concept with a huge return on investment for our beautiful state.
When were smarter with our states money, we can afford to do more with it. Ive been a financial analyst, controller, treasurer or investor my entire adult life, and I can tell you this will work.
Raising taxes or taking money away from K-12 to fund projects isnt the answer. We need more creative ideas to help our state thrive. This is one of them.
Jeff Gudman is a Lake Oswego resident and a member of the City Council. This Citizens View is a reflection of his own views and not necessarily those of the council.