Pashinski introduces Delayed Payment Plan for burden-free community college

H.B. 984 would provide tuition up front with no interest for 10 years to qualifying students

HARRISBURG, March 26 – State Rep. Eddie Day Pashinski, D-Luzerne, introduced legislation recently to provide a pathway for community college students at any of Pennsylvania’s 15 state community colleges and the Thaddeus Stevens College of Technology to complete their degree or certificate program and secure a steady, full-time job before beginning to repay the cost of their tuition. Graduates would have 10 years to pay off the cost of tuition, interest free.

“Student debt continues to overburden Pennsylvania’s higher education students and discourage 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 of participating PA students attending one of 15 state community colleges or the Thaddeus Stevens College of Technology who pursue a degree in a high-need career path and agree 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 – interest free. Anyone with an outstanding balance following those 10 years would be required to pay an interest rate of 3.5% on their remaining balance until they’ve finished paying their tuition.

One proposed way to fund the plan would be through an extension of the current 6% state sales tax to dry cleaning services. Pashinski is also working on legislation to use federal funds from the American Rescue Plan to get the program up and running. The infusion of money and the repayment of the tuition by the graduates creates a practical revolving education fund to continue for future generations.

“Without onerous debt and interest 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, 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 984 has been referred to the House Education Committee.