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November 14, 2021

Exchange tuition for a small percentage of future income: report

Imagine going to university without paying tuition up front and committing instead to paying a small percentage of your future income so that others might so the same.

That what the the Economic Opportunity Institute's so-called "Pay it Forward" plan aims to do, all the while erasing the financial and psychological barriers that keep some lower- and middle-income students from going to higher education.

Under the program, students pay no upfront tuition fees to attend school. Instead, they pay a small percentage of their adjusted gross income for a number of years after graduating: 0.75% per year of community college, or 1% per year of university, for 25 years.

Payments are placed in a trust fund that covers the cost for future students to receive the same opportunity to attend university with no tuition fees – hence, the Pay It Forward concept.


The plan has been described as "Social Security in reverse" with students getting the benefit of a higher education and then paying for it during their working life. It's a real change from the current system of cobbling together college tuition money.

Would it work? Well, it has, on a smaller scale to be sure in Australia and the United Kingdom.

And who would pay for it at the outset?

Would such an approach work in Canada? Would you support it?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...