07 Oct

State bonds are for investments — such as Oregon college students

The truly discouraging thing may not be that a large proportion of Oregon college graduates have knee-buckling levels of debt, narrowing their life options, limiting their ability to fuel the economy, buy a house or even get married and have children.

The truly discouraging thing is that they may be the lucky ones.

The situation can be even worse for young people scared by sticker shock away from even imagining higher education, or for the growing number in the worst-of-both-worlds situation of taking on debt, but with their resources giving out before they actually get a degree.

Or for the people trying to build an economic future for Oregon with a clogged pipeline of young Oregonians educated for the 21st century.

These problems are, of course, national. But they’re particularly tough around here, because Oregon’s long tradition of not investing in its colleges is matched by its not investing in its college students.
“The absence of financial aid compared to other states is a huge problem,” says Portland State President Wim Wievel. “We need to make it possible for Oregonians to attend our public institutions.”

Oregon State President Ed Ray points out that Oregon, 47th in the country in higher education support, is also 43rd in the country in financial aid for its students.

By state Treasurer Ted Wheeler’s calculation, Oregon gives out one-seventh the financial aid per capita as South Carolina.

South. Carolina.

In the past decade, the state’s major achievement has been Oregon Opportunity Grants. Capped at $2,000 a year, the grants go to just one-fifth of the applicants who qualify – and if you get one for your freshman year, there’s no guarantee of any other year.

The understanding of the depth of our hole is widespread. In its capital drive, Oregon State has raised $182 million for a scholarship fund. Asked by Gov. John Kitzhaber how it would spend additional money, the Higher Education Coordinating Commission made financial aid its first priority, seeking another $66 million from the next legislature.

But after decades of dropping back, Oregon needs more than a couple of good legislative sessions.

That’s why Wheeler is on the ballot this fall with Measure 86, which would let Oregon sell bonds to create an endowment to expand access to higher education. If it passes, the Legislature would need to decide just how to get it started.

“We’re trying to disrupt decades of bad choices on higher education,” say Wheeler. “We should prioritize it in funding, but the fact is we don’t. It will always be short-changed in a resource-constrained state.”

Of course, the evidence for that only goes back about half a century.

Setting up an endowment for higher education, as a number of other states have done, would invoke what Wheeler calls the most powerful force in the world: compound earnings. By his calculation, if Oregon had set up a $100 million fund 30 years ago, it would now have a fund of $471 million, after paying out $173 million in debt service and spinning off $351 million in financial aid – not a revolutionary amount over 30 years, but an advance.

Right now, Wheeler points out, is a particularly good time to do sell bonds for the endowment, with interest rates low and the economy advancing. Neither of these situations will go on forever; rates will go up, and when the economy slows again, higher education will take the first hits.

Again, there’s about half a century’s evidence for that.

Setting up the endowment would also provide a way to attract private philanthropic contributions, and bolster access to vocational and technical education, which has shriveled into an Oregon afterthought. That’s part of the reason Measure 86 has drawn support from groups like the Oregon Business Alliance and the Portland Business Alliance, which declared, “It is imperative that we address the increasing cost of higher education and alleviate the cost burden facing many students who, without financial aid, are not able to pursue post-secondary education.”

That number is swelling. Reports Ray, a kid from a family with an income under $30,000 has one chance in 17 of finishing college, and “It’s not getting better. It’s getting worse.”

Around here it’s not getting to where we need.

“We know we’re doing a terrible job as a state,” says Wheeler, “providing access to middle- and low-income students. It will come back to haunt us all.”

Or – in a place that says 40 percent of Oregonians should have a four-year degree, and another 40 percent at least a two-year degree – we could try to mean what we say.

NOTE: This column appeared in the Sunday Oregonian, 10/5/14.

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