With average student loan debts rapidly approaching $30,000 — more than three times what they were just 20 years ago — an increasing number of graduates are finding themselves stuck underneath an unconquerable mountain of debt. Student loan debts now weigh on more than two thirds of the nation’s graduating students. In light of what has been dubbed the student loan crisis, it’s becoming clear that the current college tuition model is unsustainable.

In 2012, a group of students from Portland State University presented their solution to the college tuition crisis to the Oregon state legislature: “Pay it Forward.” Pay it Forward (PIF) is a modified version of the graduate tax first proposed by the Chicago economist Milton Friedman. Instead of charging students a set amount of tuition, the plan would have public universities collect a percentage of their graduates’ income for a number of years following graduation. In Oregon, the solution— which now has a committee dedicated to considering the creation of a pilot program — would have recipients of bachelors degrees from state universities pay the state five percent of their income for 20 years after graduation. Importantly, PIF is a tax and not a debt, meaning that there is no way for graduates enrolled in the program to buy themselves out of it before their contract is up. In addition, PIF programs are often voluntary, meaning that incoming students would have a choice between paying standard tuition and enrolling in PIF.

The concept of PIF spread across the country after Oregon decided to evaluate the possibilities of implementation in 2013. Today, more than 20 states have created similar investigative committees. Pay it Forward’s surge in popularity is in part due to its bipartisan support. Conservative legislators in Oregon said they view the program as a student-government transaction, which they prefer to grants. Progressives, for the most part, are strongly in favor of the solution because of its ability to lower financial barriers to higher education, reduce overwhelming post-graduation debts and allow graduates more flexibility to choose low-paying career paths. Despite the overwhelmingly positive reaction to PIF from state governments and the news media alike, the program’s many drawbacks make it a flawed method of reforming student loan issues. In particular, PIF seems financially infeasible, creates a troublesome set of incentives for students and universities and maintains a negative, profit-oriented approach to education.

The process of launching PIF plans is a costly one. It presents universities with serious financial burdens and presumes a great deal of foresight into the financial future. Oregon’s investigation committee, for instance, estimates that the program would cost $9 billion dollars to start up, although some economists predict that the cost would actually be much higher. In light of these projections, it seems extremely unlikely that any state could independently cover the launch costs of PIF over the two-decade period it would take for the program to begin generating full income. As a solution, Oregon has proposed that the steep upfront cost could be paid using Wall Street bonds. However, it’s unlikely investors would agree to such a deal unless they could be guaranteed a significant profit. And if the PIF program failed to generate the predicted revenue, the state would be forced to significantly raise taxes, tuition or yearly income percentages in order to cover the difference. Instead of reducing student debt, PIF could end up simply repackaging it.

In addition, the collection of PIF funds would be tremendously complex, which would only add to the costs of the program. There is no existing mechanism in place for states to collect payments from graduates who move out of state or out of the country, and it would be very challenging for states to keep track of two decades worth of graduates at any given time. Furthermore, PIF assumes a very stable economic climate. Economic downturns could devastate university budgets as graduates are hit by pay cuts and layoffs. Since, under the current proposed plans, graduates would not be accountable for the difference in payments, the university would have to take out even more loans to cover its operating costs. These financial complexities make it unclear whether PIF is feasible or even desirable.

Pay it Forward plans also create a worrisome set of incentives for students and universities. Because the programs are voluntary, they would suffer from the problem of adverse selection. Students who plan on going into high-income fields, such as aspiring investment bankers or medical practitioners, would have a strong incentive to avoid the program and opt for traditional loans, which would cost them less in the long term. This is a major problem for the PIF model, as it relies on larger earners to balance out less profitable graduates. In response, some economists have proposed that student debt could be denominated in dollars rather than over time, such that a graduate could pay back their debt before the end of the twenty years and be debt free. Although this would move to solve the problem of adverse selection, it defeats the purpose of Pay it Forward: university payments are converted back from tax to debt, preventing the university from counting on the continuing payments from high earning graduates to balance the reduced income from lower earning graduates. When Yale implemented a similar program — admittedly, school-wide instead of statewide — in the 1970s, it was cancelled and declared a failure by administrators and participants alike before the turn of the century. Not a single class that enrolled in the plan managed to pay off their debt.

Pay it Forward might also incentivize universities to produce higher earning students in order to secure a larger budget. State funding to public universities is already lower than ever, and universities have raised tuition costs to make up for lagging state support. In theory, it might seem desirable for universities to seek to turn out more high-earning graduates since this would require the university to provide its students better professors, facilities and enhanced opportunities. In practice, however, it would likely mean that universities would strongly prefer students who plan on going into higher earning fields during admissions or steer their students towards such fields while in school. Public universities would re-orient towards professional education, making liberal arts education a privilege for those lucky and wealthy enough to attend private institutions.

This incentive to shift away from liberal arts education highlights the largest issue with PIF programs: they reinforce a profit-oriented approach to education and threaten to change the public perception of education as a public good. Public access to higher education is essential to the democratic system, which relies on a well-informed general population to engage in and evaluate debates over public policy and values. Thus, progressive reforms to the public higher education system ought to move towards making higher education a free public good — a possibility that’s more financially viable than it sounds. Instead, PIF only further entrenches the idea of individual financial responsibility for education, framing it as a commodity only valuable insofar as it provides a substantial return on investment.

If we are to value public universities as a place for critical thinking and discussions of social justice and responsibility — rather than a mere training-ground for private enterprise — it will be essential that education finance reforms work to separate higher education from the pressures of the market. In light of the massive student debt crisis, it is clear that our system for financing higher education is in dire need of reform. But, PIF initiatives are not the solution. Rather, they are superficial reforms that create a host of new financial problems while committing our public universities even further to the corporatization of education.

Art by Kwang Choi.

This article is part of BPR’s special feature on higher education. Please click here to return to the rest of the feature. 

Governor Lincoln D. Chafee ’75 is the 74th Governor of Rhode Island. Elected in 2010 on a platform of increasing government transparency and economic revitalization, Chafee will likely face challengers from both the left and right in his upcoming reelection. During a live filmed interview, Chafee sat down with BPR’s Interview Director Emily Gelber to discuss his time at Brown, gun control in Rhode Island and his upcoming chances at reelection in 2014.

Brown Political Review: Thanks for sitting down with the Brown Political Review. I wanted to start with your experience at Brown. Were you politically active when you were a Brown student?

Lincoln Chafee: No, although [during] those years — I graduated in 1975 — everything was very politically active on campuses all over America. When the 1972 presidential election occurred, which was Nixon against McGovern occurred, there was just a lot of involvement with students. Then Watergate came after that so there was a lot of involvement with students and the issues of the day.

BPR: Do you think it’s different today, that students are involved in politics like they were then?

LC: I pick up The Brown Daily Herald frequently and it seems like they are always asking for letters. Back in those days the letters would flood in [with] different opinions. You didn’t have to pull teeth to get someone to send a letter in. But it’s an ebb and flow. Other interests that are occurring might not be politics. With the Obama election, students were critical to his success across the country and I’m sure that’s true on the Brown campus. And I know here in the Statehouse, Brown students will be involved in political issues so there’s not a complete absence of activity.

BPR: Do you think this generation is distrustful of the government? Some people believe that there was an effort to stop students from voting, and students are really dealing with debt; is there a different sentiment towards government now?

LC: I don’t think so, and I don’t want to speak for you, but I don’t think there is a complete distrust. I think there is a little bit of discontent. You mentioned student debt, [the] disparity of wealth the students are seeing out there. I think the Occupy movement was an expression of disparity of wealth but I don’t think there is distrust yet. It is more that we have to stay vigilant and watch out for those that are looking out for themselves instead of the common good, and it’s always the idealism that young people have.

BPR: The Occupy movement has been criticized for having no central leadership and fizzling out; was there any change that emerged from this movement?

LC: It was a good statement. It came out of nowhere from my perspective, and all of a sudden, whether it was Manhattan or San Francisco or Providence, there were people making a statement. It occurred right as winter came on so it lasted much longer than I thought. I thought that the statement still resonates; I still see bumper stickers or signs that say “99 percent,” “I’m part of the 99 percent.” And so it was a strong statement coming as it did, without forecast.

BPR: You’re big on reducing student loans and making college more affordable. What is the meaning of a college degree now?

LC: Well, I do think that going back to my experience after World War II and the G.I. Bill and the strength of the state universities across America — whether it was Missouri or Arizona or Montana or Illinois or California — the strong institutions of affordable public higher education coupled with the G.I. Bill, that’s what made America strong. People just were able to go to that community college or go to that four-year institution and get a degree. And now we’re seeing that more and more debt, even at public institutions of higher education, just makes it more difficult.

The skills that are needed out there do take a lot of education to match the demands that companies have for higher technology, and if you are graduating with this tremendous student debt, one of the things it stifles is the chance to do something alternative, which I did after college, and what many were able to do like join the Peace Corps or Teach for America. You just can’t do that because you have student loans that you have to immediately start paying back and you want, I think, graduates to go out and get a little dirt under their fingernails in different ways and learn the ways of the world and make contacts that might take them into different paths of life that are very valuable. You cannot do that once you start having children and mortgages and all the pressures that come with those responsibilities. I mean Steve Jobs and other that have done different things profited greatly from those years of not having a high student debt.

BPR: I want to talk a little bit about your opinions on gun policy. Is there federal influence on the ability of a state to create gun legislation?

LC: It’s a mix. Certainly, we would prefer to have the federal government pass some common-sense gun safety laws. When I was in the United States Senate, we were trying to close the gun show loophole…We were also looking at the assault weapons. We already have a waiting period to buy a gun; we’ve passed that. To buy a gun, you need a background check but you can go to a gun show and buy it there and walk out with it, no background check.

BPR: Why is that?

LC: Because [sellers] said that gun shows travel around. [The gun show] would be in one community one weekend and then in another community another weekend and there’s not a chance for someone to buy the gun and then come back a week after the background check and pick it up because they’ve moved.

BPR: So it’s a matter of convenience?

LC: Yes, but there was a loophole and if you’re going to have the background checks, let’s stick to them universally. So those were federal laws. We were not successful. The Second Amendment advocates are very, very powerful and the NRA, we know about the power of the NRA. Also, hunters have an innate fear that the government is going to take away their guns. And even progressive states such as Vermont — Vermont legislators in Washington were very strong in fighting against some of these common-sense gun safety measures. Vermont has a big hunting population. There are a lot of deer hunters.

BPR: I didn’t realize hunters had such a big influence on gun policy. Do they have a huge presence in the NRA?

LC: Yes, so it’s a mix of true hunters that think that the government is going to take away their 20-gauge shotguns — and one thing leads to another, and pretty soon, they’re not going to have their bird-hunting gun or their squirrel-hunting gun or their deer-hunting gun.

BPR: And realistically, what do you think you could get passed for Rhode Island?

LC: We have a good package of bills. I think the ones that the law enforcement agencies really are strong on are the assault guns. Truly, what hunter needs an assault gun or a large magazine clip? I just think [Second Amendment advocates are] treating it as a step. First they take away my assault weapon, and then they take another. So we just have to fight back against that. This isn’t a progressive step of taking away guns. It’s just common sense; nobody needs an assault gun with a large magazine clip. You’re not allowed to hunt with them, so what do you need them for?

BPR: Many gun owners fear that “common sense” regulation like background checks and assault weapons bans will lead to more intrusion down the road. What do you say to that? Is that something that is just embedded in the American way?

LC: Well, I just know that being in politics, I went to a meeting that had nothing to do with guns — it was about fire districts in Coventry — but many of the people that were standing around were saying “Hey, don’t take away my guns.” Those are the buzzwords that come out, “Hey, don’t take away my guns.”

BPR: And is that a campaign from gun owners, catchphrases that people use to ignite fear?

LC: Well, we talked about distrust of government, and that it starts with that. They don’t trust the government [when it says] that this is common sense regulation. It’s not a subversive plot to take away every hunting rifle or shotgun that legitimate sportsmen need and have.

BPR: So, getting back to distrust of government, is political polarization in Washington increasing distrust of government?

LC: It certainly helps with distrust, the polarization that I witnessed in my time there, and it seems to have gotten even worse. Somebody yelled out at the State of the Union address at President Obama, “You lie.” A member of Congress in the middle of the State of the Union address — that to me crystallized the partisanship, such a phrase to yell out at a somber occasion. Unbelievable. We have to do a better job at coming together to solve our national problems. The two parties coming together at the table and getting the job done doesn’t seem to be working.

BPR: What do we need to do to get Democrats and Republicans to start working together on important issues?

LC: It’s a big discussion, what we need to do. They say as you get involved with these primaries — I think that is very accurate — that in order to prevail, as John McCain found out and Mitt Romney found out on the Republican side, you’re just pulled further and further to the edges. And they used to say it’s not as bad as the Democratic side, but [they are also] pulled further and further to the left. President Clinton was successful at saying, when he was running in the primaries, “I’m not going to be pulled way out to the left here. I know I have to run in November, and I think I can prevail in the primaries and still chart a more central path.”

It was in this last election when Romney’s campaign manager said, “Etch-a-Sketch, we take the primaries and shake it up and start all over again” and you shouldn’t have to be that way. You should be making statements that you’re going to be held to every day of the campaign, not shake it up and start over. Now we have a different view on immigration. Now we have a different view on international issues. Now we have a different view on guns. It shouldn’t be one position for the primaries and another one for the November election. It shouldn’t be that way.

BPR: But isn’t it that more polarized and politically extreme people vote in the primaries?

LC: Yes, that’s one of the problems.

BPR: So how do we get more people to vote in the primaries?

LC: It used to be that there weren’t primaries — you went to a convention.  And then there was dissatisfaction with the smoke-filled rooms [of conventions]. Out of the convention comes a candidate that a few delegates have elected who is now our choice for president, and so [people said], “Let’s go to the primary system.” Maybe we need to go back — and it’s ever evolving, to elect delegates and they go to the convention and argue over who has the most successful chance in November, and we’ll pick that person rather than through the primary system where you build up and you’re committed to the winning of delegates.

BPR: I’m curious, what did you think of the Republican primaries in the last election?

LC: It’s amazing to watch the Rudy Giulianis and the Mitt Romneys and the John McCains who I know as moderate — they couldn’t get elected in New York City or Massachusetts. And I know John McCain was good on environmental issues, he was good in immigration issues, he was good on tax policy when I served with him and when he ran for president, he changed. [He] was completely different on the issues. Completely different. It’s sad to see.

BPR: What’s your prediction for the future of the Republican Party right now?

LC: Good question. They are going through a lot of soul-searching. One of the reasons I left the party is their focus on social issues that seem to galvanize the base, energize the base and that was part of their strategy whether it’s immigration or gay marriage, whether its immigration, or gay marriage or abortion —so many of these social issues that I don’t think the general public ultimately cast as priorities. I’d rather [have] us get the economy going, take care of health care and have good schools and low tuitions. These are the issues people are talking about [while] the Republican Party is getting into these social issues deeper and deeper.

BPR: You mentioned your time as a Senate Republican. How have your views changed since you left the Republican Party to become an independent?

LC: Well, my views haven’t changed and that is why I left the party. I stand behind my votes against the deep tax cuts even as a Republican; in fact, John McCain and I were the only two votes against the Bush tax cuts which favored the wealthy and brought back deficits. I’m proud of my vote against the war in Iraq, I’m proud of my vote against the prescription drug benefit before we reform Medicare, because we are adding another unpaid benefit to Medicare. These are all fiscally conservative, Republican-like policies. And that hasn’t changed since becoming governor. I like being an Independent governor, the only one in the 50 states, and I don’t know whether governing has been easier since being independent, but it has been interesting to be in this position. [There are] a few other independents now in the Senate, like Bernie Sanders, but they caucus with the Democratic Party, so we’ll see.

BPR: Is there any chance we’ll see you on the Democratic ticket in 2014?

LC: Well, certainly I think about that, when I left the Republican Party, I became an independent and I did support Sen. Barack Obama for president in 2008. I then supported him again in 2012; I spoke at the Democratic Convention and heard the issues that I cared about, whether it’s environment or even fiscal conservatism which used to be Republic and is now more of a democratic issue — no deficits, using the tools of government to help build up strong middle class, and personal liberties. Republicans are turning their backs on warrant-less wiretapping and some of our First Amendment freedoms. It seems that the Democratic Party has embraced some of those issues that I care about.

BPR: What’s your feeling on gay marriage in the Supreme Court? What are we going to see?

LC: A prediction? The Supreme Court ruled on the Affordable Care Act — President Obama’s healthcare bill — favorably, with Chief Justice Roberts being the key vote there. So I think they’ll see this as a constitutional right. Why should we be discriminating against two people that love each other and want to get married? I have some guarded optimism there. Our neighboring states have all passed it — NY, CT, MA, VT, ME, NH. It’s passed our House 5 –19 overwhelmingly and we’re waiting for a vote in the Senate. So although the Supreme Court is ruling, we’re also trying to get it passed here locally, here in our Statehouse and hopefully, that will be soon and successful.

BPR: So is the movement going to come from the states?

LC: Yes, it is.

BPR: Is that a more powerful force than the federal government?

LC: I’d like both. I think the Supreme Court should rule and that the states should pass it also.

BPR: So, my last question: Who’s going to be on the ballot in 2016?

LC: Well, it seems like we just got done with ’12, doesn’t it?

BPR: I know, but everyone is talking about it. Do you think Hillary Clinton is going to run?

LC: I do, at least that’s her plan right now. I don’t know whether the fatigue will set in, whether she can really keep this us. She’s going to do a book and then go on a book tour and eventually, it’s going to catch up to her. It seems like we just ended ’12 but that’s the sport that we’re in.

BPR: Are you going to give a name?

LC: The issues here in Rhode Island are just so intense. I have my own election coming up in 2014 so never mind 2016. My focus isn’t on 2016.