WHILE Congress wrestles student-loan rates that soared to 6.8 percent down to 3.8 percent, a Washington state lawmaker has another idea for reducing college costs.

State Rep. Larry Seaquist, D-Gig Harbor,
proposes a college trust fund for students and financed by students. The Pay-It-Forward model would work like Social Security, but in reverse. Students would get the benefit up front in the form of in-state tuition.

After graduation, monthly payments based on a percentage of graduates’ incomes would replenish the fund.

Oregon’s Legislature recently approved a plan to study the funding model. Some in the U.S. Senate, including Democrat Maria Cantwell, are considering ways to help states create and fund higher-education trust funds.

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Still, a cautious approach is needed before Seaquist, chair of the House Higher Education Committee, offers the plan as a bill to the state Legislature in January. The Economic Opportunity Institute is helping shape the plan.

The groups should figure out how the trust fund would impact Washington’s public universities and colleges’ ability to raise money through tuition. Now, only about 31 percent of the academic cost of a student’s education at the University of Washington, for instance, is paid by the Legislature. Students must pay the rest.

The institutions were able to freeze tuition this year because the Legislature did not cut their budgets. Uncertainty about what happens in the next budget is reason to retain tuition flexibility.

Also, starting the trust fund would require an initial outlay, but supporters do not know how much or where the money would come from. Seaquist points to businesses, for example, technology companies paying for an increase in engineering or computer-science degrees.

But that is already happening. Boeing and Microsoft pledged $25 million each to kick-start what industry leaders hope will become a $1 billion scholarship fund for science, technology, engineering and math majors.

Seaquist also suggests shifting some of the hundreds of millions of dollars provided by the Legislature for state financial aid. That sounds like robbing Peter to pay Paul.

Supporters insist that Pay It Forward is not a loan program. But students who access the fund would sign contracts promising to pay into the fund at a later date.

Supporters are talking with the federal Department of Education and the Internal Revenue Service about ways to enforce the contracts. Sounds similar to a loan minus the marks on one’s credit rating.

Seaquist’s idea is welcome in the conversation. Students need a break on college costs. The best route would be consistent state support that keeps tuition low.