Pashinski introduces Delayed Payment Plan for Burden Free Community College

H.B. 2287 would provide tuition up front to qualifying PA students, be repaid with future income

HARRISBURG, Feb. 6 – State Rep. Eddie Day Pashinski, D-Luzerne, introduced legislation today to provide a pathway for community college students at any of Pennsylvania’s 14 state community colleges to complete their degree or certificate program and land a steady job before having to begin repaying their tuition.

“Student debt is crushing Pennsylvania’s higher education students and discouraging young people from pursuing a degree that can significantly increase their ability to find a good job,” Pashinski said. “Meanwhile, well-paying jobs go unfilled across the state because we don’t have enough workers with the education needed to fill those roles. My Delayed Payment Plan would help address each of these issues, allowing our young people to improve their career prospects while filling the family-sustaining jobs of today and tomorrow.”

Once established, the Delayed Payment Plan program would pay up-front for the community college education for participating PA students who attend one of 14 state community colleges, pursue a degree in a high-need career path, and agrees to stay in Pennsylvania after graduating until their tuition is repaid. The agreement would require the graduate to pay back what they owe using a minimum of 2% of their future earnings within 10 years of graduating. Anyone with an outstanding balance following those 10 years would be required to pay a below-current market interest rate of 3.5% on their remaining balance until they’ve finished paying for their tuition. The plan would be funded through an extension of the current 6% state sales tax to dry cleaning services, which is estimated to bring in around $45 million annually, as well as the repayment of tuition by participants.

“Without onerous debt payments, graduates and students will have more money to support their families, purchase a home, and help grow Pennsylvania’s economy,” Pashinski said. “It’s time for Pennsylvania to take the lead when it comes to addressing the student debt crisis, while simultaneously providing a better-educated workforce for employers. It’s time for the Delayed Payment Plan.”

According to a study by the Milken Institute, “adding one year to the average years of schooling among the employed in a metropolitan area is associated with an increase in real GDP per capita of 10.5 percent, and an increase in real wages per worker of 8.4 percent.” Pashinski’s bill would allow PHEAA, the agency that would administer the program, the ability to extend the program to qualifying students at Pennsylvania State System of Higher Education schools after five years.

More details on the plan and how it would be funded are available here.

House Bill 2287 now awaits referral to a committee.