The Oregon Method
In 2013, Oregon proposed a system that would postpone paying for college and eliminate student loans. The "Pay It Forward" plan would provide higher education for free, but graduates would pay 3 percent of their income for the next 24 years.
The average graduate with a four-year degree would pay almost $40,000 over their lives or $7000 more than the cost of the degree. Those with higher incomes would pay more, of course, and lower incomes would pay less. Students would purchase their degree at a price relative to its value to them.
Yet student debt is not all about tuition. Room, board and supplies are expensive. Full-time students would be either working or borrowing to cover those costs. They would not graduate debt-free.
The system is far from reality. The state would have to pay $9 billion over 25 years before graduates would pay back enough to fund Oregon's state universities. The tuition-free environment may discourage quick graduations. If students choose to take another year or more to finish school, the state pays even more.
It's a decent thought, but the idea has many holes.