I’ve written before about “Pay It Forward,” a tuition restructuring proposal in the works in Oregon and under serious consideration elsewhere. Under the PIF plan, students would pay no tuition fees while attending Oregon’s public colleges, instead committing to pay a certain percentage of their income to the state for a certain number of years after graduation.

The most obvious benefit of PIF for students is the payment calculation method — with it, those who choose (or otherwise wind up in) low-paying jobs won’t have to pay as much as those who make more. What this means, though, is that PIF is pretty much just an income-based-repayment student loan system under another name.

Which is itself mostly fine, since income-based-repayment is a pretty good way to set up student loans, in principle. But there’s more than principle at stake here, and it’s in the implementation that the real problems arise.

The first problem is that PIF is being touted as an alternative to student loans, and even as an end to tuition, which it absolutely is not.

The second problem is that as with any major financial transaction, the fine print is what gets you. And the fine print on PIF contains plenty of cause for worry.

That’s the focus of an anti-PIF statement released yesterday by a coalition of education advocacy organizations, including the American Federation of Teachers, the American Association of University Professors, the Student Labor Action Project, and the National Education Association. In their statement, the groups raise a number of important concerns about PIF, including the following:

  • PIF as a model does nothing to remedy government disinvestment in colleges and universities, the core cause of the current crisis in public higher education.
  • By institutionalizing the idea of college education as something that “pays for itself” via student income deductions, PIF could actually exacerbate the crisis in public higher education funding.
  • Depending on their income and the repayment structure, PIF could end up costing some students far more than traditional tuition.
  • Because PIF is intended only as a replacement for tuition and fees, students enrolled in such a program would still have to cover the other costs of college, including room and board, textbooks, housing, and transportation. Such students could well wind up saddled with PIF obligations and student loans.
  • How PIF would integrate with current structures of student aid and student organization funding is by no means clear.

In addition to all these concerns, the statement raises alarms about what is for me the central paradox of PIF.

The premise of Pay It Forward is that the payments made by high-income students will subsidize those made by low earners. But because students will know this in advance, that structure will give students who anticipate high earnings a disincentive to participate. A PIF-only system will encourage such students to enroll at other institutions, while an optional PIF will lead many of them to opt out. Either way, the PIF-enrolled student body will likely skew poorer in lifetime earnings than that institution does now, and the more the students earnings drop, the higher their PIF contribution will have to be raised to keep the revenue stream afloat.

Under PIF, in other words, you could easily chase potentially high-earning students out of the system, forcing those with lower projected earnings — and those without the financial wherewithal to opt out — to bear an ever-increasing burden of higher education costs. At the same time, PIF would give colleges and states strong incentives to favor students with high earning potential in the admissions process.

If implemented with care, forethought, and robust public funding, PIF could be an interesting — though not particularly earth-shattering — development in the higher education funding debate. Without such safeguards, however, it looks like a wolf in sheep’s clothing.