A perspective from Oregon’s mid-Willamette Valley

M86: A question of more debt

Written October 19th, 2014 by Hasso Hering
It's may be hard to think about debt on a glorious October afternoon, but somebody's got to do it.

It’s may be hard to think about debt on a glorious October afternoon, but somebody’s got to do it.

On Ballot Measure 86, the proposed state endowment to help Oregon students pay for post-secondary education, the Voters’ Pamphlet is better than nothing, but not by much. It explains the basics of the measure, but important questions are left unanswered.

Seven pages of small print, that’s how much space in the state pamphlet deals with Measure 86. If you have read it all, you may have caught a grammatical error (“whom” instead of “who”) by the president of a university foundation, but you won’t know pertinent details of this proposal, such as how much it would cost, when it would take effect, how many people it would help, and whether it would in fact help anybody except university administrators.

The measure would authorize the state to sell bonds (translation: “borrow money”) and put the proceeds into an “Oregon student opportunity fund.” This debt could be up to 1 percent of Oregon property value or, at present, $4.3 billion. It would be repaid from investment earnings or, if necessary, from state income taxes. The bond proceeds would be invested, and surplus earnings would be lent or given to “Oregon students.”

In the pamphlet, assorted figures in Oregon higher education argue for this program on the grounds it would help more people meet the crushing burden of the price of college. Another way to solve that problem would be to lower the price by reducing the cost.of higher education, but that alternative never gets mentioned. Instead, the constant cry is for more financial aid so that the colleges can keep charging more.

The people arguing for the program in the pamphlet say it will help more Oregon students get a better education, thus enabling them to earn more money, in turn boosting the Oregon economy. What’s to keep Oregon students getting help from the program from then taking jobs in states where opportunities are better?

What if the market tanks and there are no earnings from the invested funds? If that happens, do student loans and grants get canceled? What if the earnings are not sufficient even to meet the debt service? Would the money needed then have to be raised by selling even more bonds? Or would income taxes be raised again?

The backers of M86 bemoan that so many students now end up deeply in debt, nearly $27,000 on average in the college class of 2012, according to one. The same “argument in favor” notes that from 2005 until 2012, tuition at Oregon’s public universities soared 50 percent. It’s ironic that a state so worried about ruinous student debt wants to solve the problem not by controlling price hikes at state institutions but issuing more and more debt. (hh)

8 responses to “M86: A question of more debt”

  1. Jim Engel says:

    I voted “NO” as I read this measure to be a back door method of financing a no cost post secondary education for illegals or children of illegals at property owners expense. Very vague on how to pay back. Would the now & then “Kicker Refund” be used if the market is low? I see little in the way of making the student carry the burden or at least be responsible for some of it. JE

  2. Theodore Salmons says:

    Absolutely NO. When if ever has Oregon made it easier for students to get “financial assistance” (read borrow more money) and then not raised tuition/fees/housing to eat up each and every cent and more of the “new money” the students now have available. Freeze professor’s and administrator’s salaries for the next five years like so many people in the private sector have had to put up with. If they’re so well educated and great at their jobs they shouldn’t have any trouble finding employment in private universities and get away from the public funded salary and PERS trough. And as always those with degrees in art history and Russian literature always have a promising future at Starbucks.

  3. SReno says:

    Not sure how much universities are really working at controlling costs. It seems whatever level the maximum amount you can borrow from the government, that is how much tuition is. I feel sorrow for these kids, they are not sophisticated enough to understand it is their future earning that are being leveraged against. The universities put all these bells and whistles out there; football games, life on campus, cute mascots (Beavers and Ducks) and sells them on the college experiences. Next thing the kid knows, they are out of college, deep in debt and wondering what happened?

    Now that they have taken most of what the kids are going to earn in the future, the universities are hoping John Q. Taxpayer is ignorant enough to be next up to bat. I think we really need to scrutinize the books and find out; can we help these kids take back their future?

  4. Richard Vannice says:

    If the $27,000 mentioned is all that they owe they should be happy. How many will go out and buy a new car for that much or more and think nothing of it????I could find nothing in the measure that addresses those getting assistance repaying what they receive. Another freebee??????????????????

    • Hasso Hering says:

      Somewhere in the explanations or the arguments there is a statement that students would get aid in the form of grants, loans or some kind of “pay it forward” arrangement. The latter would have them promise to pay into the fund a certain percentage of their income once they had a job. (hh)

  5. Richard Vannice says:

    I don’t feel that a “PROMISE” is the same as a signed agreement with specific provisions as to interest, when re-payment will start, minimum amount of monthly/yearly payment, etc.
    Promises are unenforceable, contracts are.

  6. Bill Kapaun says:

    The state needs to reduce the cost of education. The cost has gotten beyond absurd!
    Students need to get an education that will provide them with the tools to make a good living and pay back whatever loans they accrue. I think too many people take classes for a “feel good” occupation that pays miserably.
    IF you are “smart enough” to go to college, you should be “smart enough” to plan for your future beyond college. Mortuary Science would be a good one with out aging population.


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