SALEM, Ore. -- Oregon Treasurer Ted Wheeler has a plan to make higher education more affordable, proposing the state take on debt so students don't have to.
Wheeler's plan, which faces several legislative hurdles and would have to be approved by voters, aims to use proceeds from state bond sales to establish a permanent scholarship fund to help students from low- and middle-income families attend a university or community college, or to receive vocational training.
"It would be a fund unlike anything else that we've been able to find anywhere else in the United States," Wheeler said, testifying before the Senate Education and Workforce Committee on Thursday.
The state typically invests in physical capital such as buildings and roads. Investing in students, human capital, is something new, Wheeler said.
The plan, embodied in Senate Bill 11 and House Joint Resolution 1, advanced from the Senate committee with a 3-1 vote after more than an hour of testimony from students. The bills now go to different legislative committees for review. If approved, the plan would be put to Oregon voters, most likely in 2014.
Wheeler, who's been treasurer since 2010, said his proposal is projected to eventually triple the amount of scholarship money available to help students fund higher education by selling $500 million in bonds backed by the state's general fund. It would use the interest earned, estimated to be about 7 percent per year, to establish a permanent fund for student aid.
Republican Jeff Kruse of Roseburg, the dissenting vote, said he understands that higher education is underfunded, but he isn't reassured that taking on debt is the solution.
"I get concerned over how much debt we're creating and how long it's going to take to pay it back," he said.
He suggested trying to reduce the cost of higher education.
"I wish we looked at why the cost of education has skyrocketed over the past few decades, and we pretty much ignore that," Kruse said. "We try to come up with ways to fund this accelerating curve without looking at other ways we can flatten the curve."
The plan will likely be sent to a capital construction budgetary subcommittee, where it could be restructured -- and the proposed $500 million bonding level lowered -- as it competes with other projects seeking general fund-backed bond money, said the treasurer's office.
The state currently awards between $40 million and $50 million in "opportunity grants," which are given on a first-come, first-served basis, leaving more than 80 percent of eligible students without financial aid. Wheeler said his plan could increase this fund by 50 percent in the first year.
Oregon's public colleges have seen the greatest spike in enrollment numbers over the past five years, yet the state ranked fifth-lowest in the nation for the amount of public support it provides students, according to a report by the Association of State Higher Education Executive Officers released Wednesday.