What is an IDA? It’s a savings plan for low income people. The Oregon legislature defines what kind of goals people can save toward, and it also sets a limit on how much money can be raised from donors. Contributions come from Oregonians like you and me. Low-income Oregonians enroll in the program and start saving to buy a home, or start a small business, or further their education, or other goals. Once they reach their financial goal, their savings are matched three to one, up to a maximum of $3,000. Along the way, they go to workshops to build financial savvy.

How many peoples’ lives are better because of this program? Cynthia Winters at The Neighborhood Partnership Fund, the nonprofit that oversees the program, informs me that there are currently over 1,100 low-income Oregonians enrolled. Last year, over 500 Oregonians completed the program. This year, even more will be able to enroll.

Then there’s the donors. Last year, this group of Oregonians at the other end of the economic spectrum from the participants also benefited from the program through the tax credit for donations. Here’s how the credit works:

The IDA Tax Credit begins with your contribution to the Neighborhood Partnership Fund. 75% of your contribution becomes a credit on your State of Oregon income tax return. For example, if you as an individual made a donation of $1000 to the IDA Initiative, you would then be qualified for a tax credit of 75%, or $750 against your state income taxes. The tax credit reduces the state taxes that you would otherwise pay. (Source)

I was surprised to learn a couple things when the 2007 report to donors came out a few weeks back. One, that only 333 people contributed $6 million. Two, that the average contribution was over $17,000. I contributed, but given the amounts raised from so few people, I imagine that my tiny contribution actually skewed all the data downwards! Regardless, I benefited from lowering my tax liability and from feeling like, for once, I was certain that the taxes I paid were doing something good.

So here’s a challenge to my readers, family, and friends in Oregon: consider making a donation this year (note: link is to a .pdf). Right now, there are over $7 million in tax credits remaining. And while it’s great that a handful of wealthy Oregonians are getting tax breaks in a way that’s pretty noble, the tax credit could also benefit a lot of “average” Oregonians out there…you know, the middle-income ones who complain about how their taxes are spent. I’d love to see that thousands of Oregonians contributed to this program in 2008 when the next report comes out, not just for the tax breaks, but for a greater sense of community and being in this together.

^{*I am not an accountant or tax specialist, and this is not financial advice. See someone who is qualified to help you that way if you want to know about how this might affect your particular situation.}

Overall, the legislation seems like a rather mixed bag to me, but I am definitely in favor of increasing Pell Grant funds, lowering student loan interest rates, and offering student loan forgiveness to “public service employees”; it’s a step, however small, to making education more accessible for the millions of people who aren’t wealthy and have not chosen professions that will ever make them wealthy.

Of particular interest here is the section related to nonprofit workers. The final language of that section of the bill (ah, the search for an unbowdlerized version can be hard) is included below, however appalling the format may be.

TITLE IV–LOAN FORGIVENESS

Section 455 (20 U.S.C. 1087e) is further amended by adding at the end the following:

`(m) Repayment Plan for Public Service Employees-

• `(1) IN GENERAL- The Secretary shall cancel the balance of interest and principal due, in accordance with paragraph (2), on any eligible Federal Direct Loan not in default for a borrower who–

• • `(A) has made 120 monthly payments on the eligible Federal Direct Loan after October 1, 2007, pursuant to any one or a combination of the following–

• • • `(i) payments under an income-based repayment plan under section 493C;

• • • `(ii) payments under a standard repayment plan under subsection (d)(1)(A), based on a 10-year repayment period;

• • • `(iii) monthly payments under a repayment plan under subsection (d)(1) or (g) of not less than the monthly amount calculated under subsection (d)(1)(A), based on a 10-year repayment period; or

• • • `(iv) payments under an income contingent repayment plan under subsection (d)(1)(D); and

• • `(B)(i) is employed in a public service job at the time of such forgiveness; and

• • `(ii) has been employed in a public service job during the period in which the borrower makes each of the 120 payments described in subparagraph (A).

• `(2) LOAN CANCELLATION AMOUNT- After the conclusion of the employment period described in paragraph (1), the Secretary shall cancel the obligation to repay the balance of principal and interest due as of the time of such cancellation, on the eligible Federal Direct Loans made to the borrower under this part.

• `(3) DEFINITIONS- In this subsection:

• • `(A) ELIGIBLE FEDERAL DIRECT LOAN- The term `eligible Federal Direct Loan’ means a Federal Direct Stafford Loan, Federal Direct PLUS Loan, or Federal Direct Unsubsidized Stafford Loan, or a Federal Direct Consolidation Loan.

• • `(B) PUBLIC SERVICE JOB- The term `public service job’ means–

• • • `(i) a full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education (including early childhood education), social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy in low-income communities at a nonprofit organization), public child care, public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or at an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; or

• • • `(ii) teaching as a full-time faculty member at a Tribal College or University as defined in section 316(b) and other faculty teaching in high-needs areas, as determined by the Secretary.’.

      Initial post on topic here.