Who came up with a student loan plan first—and should you care?

Last week, we noted here that state Sen. Daylin Leach (D-Montgomery) had recently written a legislative memo outlining a plan called “Pay it Forward, Pay it Back,” which would create a pool of money for Pennsylvanians to go to state school with no money down, then pay it back when they obtain employment upon graduation.

The idea itself was somewhat timely. The U.S. Congress had recently screwed the pooch as it pertained to subsidized Stafford Student loans, allowing the interest rate to double, from 3.4 percent to 6.8 percent, which would have a big effect on Pennsylvania college students, who take out more cash for higher education and are left with a higher debt than your typical college bro across the country. Congress eventually did pass a new plan and bring rates down to 3.9 percent, which will then be allowed to raise as the economy grows over the next few years.

That Leach announced the idea was significant. Not only was it a really liberal plan—and the Senator from Montgomery County is quite liberal—but it was even more liberal than the ideas it was based upon, like one of the same name in Oregon. Unlike that “Pay it Forward” bill in the northwest, Leach’s legislation would not add interest onto the cash those students borrowing from the fund would have to pay later on, which will likely be part of similar bills passed in other states—many of which are currently in the “commission” phase.

When we originally wrote about the bill, based upon its premise having been spreading throughout the U.S., we noted Leach may be a dreamer, but he’s not the only one. Little did we realize another such dreamer lived just a few miles from Leach’s MontCo home and has something else in common with him, too: State Rep. Brendan Boyle, who represents parts of Northeast Philadelphia in Pennsylvania’s House of Representatives, will be running against Leach in next year’s Democratic primary for Pennsylvania’s 13th U.S. Congressional seat, where Rep. Allyson Schwartz, now in the running for governor, will not be standing for reelection.


On Sunday, August 11th, Boyle—whose bid for Schwartz’s seat has been endorsed by Bob Brady and Darrell Clarke—announced his own “Pay it Forward” plan, one which would do what states like New Jersey, Colorado, Ohio and Michigan have already done: Create a commission to figure out how much the idea would cost and what might be required to run it.

In a normal year, the two bills wouldn’t really be in competition with one another. After all, both pols seem to agree on the basics (college tuition is too damn high; and so is the debt Pennsylvania students are left with) and they represent different chambers of the state government (Boyle is in the House; Leach is in the Senate). Mirror legislation is often introduced in both chambers, since both need to hold a vote for anything to become law and in normal circumstances, the bills would be reconciled.

But this isn’t a normal year, as both legislators are positioning themselves to step up to the federal level in 2014. Leach has already spoken up to note to the press that his legislation is a bit more concrete in that it doesn’t create a commission to study debt and loans—it dives right in, and pays for itself with a tax on natural gas extraction from the state.

He also played politician when asked about Boyle’s bill, according to PoliticsPA. “I was surprised to read about Rep. Boyle’s bill. It seems to be the same bill, they even have the same name,” Leach said. “But you know they say imitation is the sincerest form of flattery.”

Boyle, rather, noted he and his staff had been working on the bill for a while, and that a gas extraction tax would make it tough to get through the Republican-led Legislature, since a majority of Republicans, and the governor, have been against a statewide tax on gas—or anything!—since coming into office in 2011. Corbett’s takes the “What, me worry?” stance on natural gas: that local municipalities can tax themselves if they feel it necessary.

(This allows him to claim he’s never raised taxes even if he’s given municipalities no choice but to raise taxes on themselves to stay alive during the recession.)

Both Leach and Boyle are eyeing a key demographic and important issue, and we’ll give them this: They can’t both leave Harrisburg for Congress next year, which means the idea will stay alive in Pennsylvania government after the primary. It also means there’s a chance another supporter of college tuition solutions headed to Washington. Most recently, Congresswoman Karen Bass (D-CA) introduced a similar bill which would find students going to college with no money down, then paying 10 percent of their annual salary back for 10 years; and if schooling isn’t paid off by then, the debt would be forgiven.

Which brings us to the next point: Should you care about this? That depends on whether you’re an in-state college student or the parent of one. A “Pay it Forward, Pay if Back” system has been ruled everything from a great idea to masking a problem the U.S. is going to have to come to terms with at one point or another: Our $1 trillion student debt crisis, and the fact that tuition now covers about 36 percent of most college’s budgets. That percentage was 22 in 1984. Talk of a student loan bailout at some point in the future is not far-fetched.

Given the time frames of other states’ “Pay it Forward” bills, it’s hard to imagine something like this gets passed before the two compete against each other in the 2014 primary—in addition to former Congresswoman Marjorie Margolies and physician and healthcare activist Valerie Arkoosh, who are also competing in the primary. At that, given the governor’s stance on general money ideas, he’s not signing anything that would subsidize anyone other than an ethane cracker plant, such an idea wouldn’t even get started until, earliest, February 2015.

Follow Randy on Twitter: @RandyLoBasso

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