February 11, 2014 Bookmark and Share

Knezek, Abed, Ananich Introduce ‘Pay it Forward’ Legislation

Bill would remove financial barriers to higher education

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Known as the Smarter Michigan and Retaining Talent (SMART) Act, this bill would set up a pilot program to allow students to attend a public university or community college with the agreement that they would pay back a small percentage of future earnings into the program.

LANSING – State Representative David Knezek (D-Dearborn Heights), state Rep. Theresa Abed (D-Grand Ledge), and state Senator Jim Ananich (D-Flint) introduced legislation today that would put Michigan on the path to removing all financial barriers to higher education in the state. Known as the Smarter Michigan and Retaining Talent (SMART) Act, this bill would set up a pilot program to allow students to attend a public university or community college with the agreement that they would pay back a small percentage of future earnings into the program. These funds would then be used to ensure future students would receive the same access to higher education without financial obstacles.

“The issue of rising tuition costs was one of the first things that pushed me to run for public office,” Knezek said. “Michigan families are desperate for a solution that will ensure every single student who wishes to obtain a degree can do so without rising tuition costs discouraging their attendance. After years of funding cuts for higher education, tuition rates continue to rise, and more and more students are priced out of a college degree. Until we are able to stem this tide and convince our colleagues that we must make funding education a priority, we need to look for innovative solutions such as the SMART Act that will expand access to students who currently cannot afford college. SMART will make Michigan more attractive to families and students looking for an education-friendly state to call home.”

The SMART Act allows for both private and public funding of the pilot program; however, it expressly forbids the use of School Aid Fund appropriations. Students’ payback portion will be determined by how many years they participate in SMART and whether they attend a community college or university. In addition, it will not begin until students graduate and find employment that pays them above the federal poverty level. This plan would move away from the old formula in which students pay based on the amount of money loaned, instead developing a new model where students will pay based on the income generated by the education they are able to attain.

“We need to widen access to a college education by making it more affordable,” said Abed, who has introduced a resolution asking the federal government to partially fund the program. “An interest-free repayment system like SMART does just that. And if Michigan can get federal funding to finance the pilot program, which my resolution seeks, then it’s a win-win for our students and our state.”

U.S. Sen. Jeff Merkley (D-Ore.) has introduced a bill in Congress, S. 1884, that would fund state Pay it Forward programs such as SMART. U.S. Reps. Suzanne Bonacimi (D-Ore.) and Dan Kildee (D-Mich.) introduced a similar bill in the U.S. House of Representatives. If either of these bills became law, SMART could be financed with federal dollars.

“The mountain of debt facing families for higher education makes it harder for our students to compete for good jobs,” Ananich said. “This legislation is a creative approach to helping ensure opportunities for all kids to have access to our world-class schools.”

“We are very proud of Representative Knezek, Senator Ananich and Representative Abed for proposing a new vision for funding higher education in Michigan,” said Michelle Alwardt, vice president of the Student Association of Michigan and a senior at Oakland University. “The current system is unsustainable, and the student debt crisis impacts more than just our graduates. Investing in our students is the key to creating a bright future for Michigan as a whole. We are looking forward to working with Representative Knezek to generate meaningful reforms that truly help Michigan students.”

“State Representative David Knezek’s SMART tuition proposal places Michigan among state leaders in developing new models for tuition-free access to higher education,” said John Burbank, executive director of the Economic Opportunity Institute. “SMART is an innovative model based on the concepts of Pay It Forward for higher education. All participants who benefit also contribute a pre-determined small percent of income for a set number of years, thus enabling the state to provide SMART access to college for a growing number of students in future years. Further, SMART eliminates the practice of having to finance college education with student loans, which have become significant impediments to graduates pursuing the American dream. SMART opens the doors of higher education for middle class and low-income students.”

 

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