IN IRELAND, the cost of finishing a degree continues to creep upwards. In Oregon, lawmakers are looking at a way to reduce the cost of going to college by taxing graduates for a quarter of a century.
The Oregon State Legislature has approved an idea that deserves examination by the Irish Minister for Education. It's called Pay It Forward and means free education for students who attend public universities in the State of Oregon. In exchange, students would have three percent deducted from their post-graduation paychecks for approximately 25 years. The money would go into a fund to pay for future students.
Oregon's Higher Education Coordination Commission has a Pay It Forward pilot project for consideration by the 2015 Legislature. Unlike Ireland, Oregon must figure out how to fund the program’s start-up costs, estimated at $9 billion, since the initial students who attend tuition-free would be years away from entering the labour force.
In the United States, federal student loan interest rates now stand at 6.8 percent. Some arts majors who don't get proper jobs end up suffocating under that debt.
Most people I know in Ireland want to continue the legacy of free third level education but every year, the direct cost of going to college increases in Ireland because of registration fees and administrative charges. I believe I will pay five figure sums for every year of Mia's education when she heads towards university in 2025. And if that happens, fewer students will enter Irish third level, the sector will atrophy and the much-hyped highly-educated Irish workforce will be relegated to an outdated IDA brochure.
The Pay It Forward concept originated in working notes of the Economic Opportunity Institute, a nonprofit policy group in Seattle. It is based in part on a model used in Australia. Something like the Australian or Oregon system has to happen and should enter public discussion during the lifetime of the current government.
If Oregon's plan becomes law, it would provide some relief to students who are unable to translate their degree into a decent-paying job. For example, a student whose adjusted gross income is $600,000 over a 24-year span would pay $18,000 for his or her four-year degree. A student who makes $2.5 million over that same timeframe would end up paying $75,000. Someone who makes nothing at all would contribute nothing to the fund. Someone like Denis O'Brien would contribute an astronomical amount.
Translated to Irish society, students who finish a Level Six would pay 1.5 percent, instead of the three percent taken from paychecks who finish an Ordinary or Honours degree. Those who start but do not finish their course would pay a pro-rated portion of their incomes. With a simple handshake, Irish Revenue could extract payment through the US IRS for Irish citizens who move to the States. With some simple cross-department co-ordination and some serious discussion at G-20 summits, Ireland (and the States) could tie the issuance or renewal of a passport to one's tax compliance. Or simply provide electronic cross-referencing to Irish passports to tax clearance, re-establishing the tax collection status of border controls.
I'm sure there are systemic reasons that would cause pause for any of these methods of extracting wealth from those who leave the country but the mood of many international leaders is to clamp down on both corporate and personal flight of taxable earnings.
[Bernie Goldbach lectures in creative multimedia for the Limerick School of Art & Design. This blog post does not reflect institutional opinion.]