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College is a good investment for the state

Usually when the state government borrows hundreds of millions of dollars, it uses the money to invest in physical assets such as roads, bridges and other structures.

Oregon Treasurer Ted Wheeler, however, has different designs on the state’s borrowing capacity. He wants to use proceeds from a pair of $250 million bond sales to invest not in buildings, but in brains.

Wheeler is pushing the Student Opportunity Initiative to make college more affordable for generations of Oregonians. While we still have a few questions about the specifics, we like the idea of viewing Oregon students as this state's most important investment.

Helping all students who need it

The Opportunity Initiative — Senate Bill 11 and Senate Joint Resolution 1 — would directly attack the issue of college access and affordability by making a vast pool of scholarship money available to people trying to pay for higher education. If the Legislature and voters approve Wheeler’s idea, the state would sell a total of $500 million in general obligation bonds in 2014 and 2015. That money would be funneled into the Opportunity Fund, which would generate investment returns to fund student aid grants.

The Opportunity Fund would require no new taxes. As the state is selling these new bonds, it would retire older debt, providing the funding stream needed to pay off the bonds. In the meantime, the $500 million endowment should grow at a faster rate than the low interest the state would pay on the bonds, producing money for student aid.

But Wheeler has bigger plans. With additional state contributions, he envisions a fund equaling $6 billion within three decades.

The underlying math can get a little complex, but the goal for this proposal is easily expressed: eventually generate enough investment returns each year to meet the unmet financial need of every Oregon student for two years of post-secondary education. That’s a big improvement from the situation today, when the average student loan debt for four years of school is about $26,600.

Long-lasting consequences

When coupled with the low cost of community college, the Opportunity Fund raises the real possibility that every Oregon student who wants to continue his or her education could do so.

Such a whopping investment in Oregon’s human capital will raise the state’s per-capita income, attract quality industries to Oregon and reduce college debt loads that are now burdening young people as they enter the work force.

The Opportunity Initiative, which is set for a Senate work session on Thursday, requires action by the Oregon Legislature, which must pass SB 11. The Legislature also must forward a referendum to the statewide ballot to create a permanent Opportunity Fund that is constitutionally protected.

This proposal deserves to be sent to voters. Rather than simply bemoaning a continual shortage of money, this is a rare chance for Oregon to do something bold in the name of education.



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