Paying it Forward: Free post-secondary education with a catch. - Polidicks

[quote]In return for free tuition, students have to agree to pay a fixed percentage of their future income for a specified number of years to a special fund that would pay other students’ college bills. [...] More than 20 states are looking at some version of the plan, although most are simply looking at studying it, while the Michigan bill would set up a pilot program. [...] Michigan’s plan would require students to agree to pay a fixed percentage of their post-collegiate income — 2% for community college students and 4% for university students — to the fund for five years for each year they attended school under the program. So, a student who went to the University of Michigan and graduated in four years would have to pay 4% of their income back every year for the first 20 years after college. [...] The legislation introduced in Michigan would establish a fund — and prime it with $2 million in start-up money — for a pilot program involving 200 students. The state treasury department would be in charge of tracking the money and verifying income. [...] He said the plan helps students manage costs because the payment scales with income. For example, someone using the Michigan plan to go through college, and getting a job with a $30,000 a year salary, would pay $100 a month. [...] "Spreading payments over 20 or 25 years, and linking them to earnings, ensures borrowers against hard times. Payments flex up and down automatically, with borrowers paying less when their incomes dip and more when incomes rise." But there are drawbacks, she points out. A borrower who does well in the labor market could end up paying back many times the cost of his or her education. Payments go on for a fixed number of years, and don’t stop even if a borrower has paid back a debt many times over. "...An easy fix is to denominate the debt in dollars rather than years. When a borrower finishes paying off her loan, she stops paying." [/quote] [url]http://www.freep.com/article/20140319/NEWS06/303190038/Pay-it-forward-Plan-would-allow-Michigan-students-to-attend-college-for-free-[/url] I think its a pretty cool idea. I dont like the 20 year plan, but the debt one makes sense. However, I can see why they need the 20 years in order to rebuild the money the state is putting in. If the program cant self sustain, it wont work at all.

I would totally be up for that here in Arizona.

In the UK you can get a Student Loan to pay for University, but it has no affect on your Credit Rating and you don't pay back till your income is at least £15,795 a year. So if you for some reason never get a job that pays that much, you never have to pay back your student loan. If you do get that much you pay 9% of your income a month back.

[QUOTE=Chains!;44289410]In the UK you can get a Student Loan to pay for University, but it has no affect on your Credit Rating and you don't pay back till your income is at least £15,795 a year. So if you for some reason never get a job that pays that much, you never have to pay back your student loan. If you do get that much you pay 9% of your income a month back.[/QUOTE] That is fixed to 21,500 quid a year now.

This sounds good! Student loans as they currently exist are a disgrace to this country and I'm happy to see progress being made.