My View: Everyone Deserves Affordable Education
I’ve been reflecting on this challenge as I considered entering the race for state treasurer, a position that soon will be vacated by my friend Ted Wheeler. It is a decision I officially announced last week.
The problem with politicians is that they’re very generous with other people’s 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 world’s 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. I’d like to put their and other Oregonians’ names on a pledge.
I’m proposing the Oregon Giving Pledge, made up of our state’s 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. That’s 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 postsecondary education more affordable for our children and grandchildren.
Best of all, this doesn’t 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, they’ll pay close to $32,000 for the next 10 years. And that’s 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. It’s a simple concept with a huge return on investment for our beautiful state.
When we’re smarter with our state’s money, we can afford to do more with it. I’ve 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 isn’t 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 My View piece is a reflection of his own views and not necessarily those of the council.