With the midterm elections right around the corner, Oregon could soon make history by allowing the state to sell bonds to set up an endowment with bonds sold to help provide financial aid for college students.
If passed, Measure 86 would amend the Oregon Constitution to allow the state to borrow funds for non-capital purposes.
Ted Wheeler, Oregon’s state treasurer, has championed the measure’s campaign because he thinks that the state can create returns on the endowment that will be higher than the price of repaying the bonds.
With decreased state funding for education in recent years, Wheeler felt that major change was needed. Oregon’s amount of financial aid for public universities has decreased by 34% in the past five years, according to the State Higher Education Executive Officers Association
“It’s a bold proposition, but considering where we’re starting, it requires us to take some bold steps,” he told Bloomberg.
About $500 million in bonds would likely be needed to fund the endowment, though that could vary based on interest rates. If the measure passes, the funds would be managed with Oregon’s pension pool.
Wheeler’s estimations show that the funds could earn an average of 7% per year. Donations would also help raise money for student aid.
Leading up to the election, there are still mixed opinions for the measure. Some voters think that it is too much of a financial risk.
Others, like Mike Goodwin, president and CEO of the Oregon State University Foundation, think that it could help secure much-needed resources for the state’s education system.
In an editorial for The Oregonian, Goodwin cites the study “Do the Benefits of College Still Outweigh the Costs?” as an example that college degrees are worth the investment. Since Oregon is ranked 47th in the country for higher education support from legislators, many students in the state are incurring long-term debt to get the education they need.
Goodwin believes that Measure 86 will “create a permanent, growing endowment” to help fix the state’s education funding problems.
Though Oregon allows people to vote by mail, the polls will be open on Election Day from 7:00 a.m. to 8:00 p.m. Pacific Time.