YOU'VE HEARD the argument before: Illegal immigrants suck away American jobs, health care, and money.

But a new study from the Oregon university system flips that argument on its head. According to the new fiscal analysis, a bill to let children of undocumented immigrants pay in-state tuition at Oregon schools could actually make the state money.

The report emerged as hundreds of people turned out to support the "tuition equity" bill, SB 742, at a hearing in Salem last week. The new law (sponsored by Portland Democrat Michael Dembrow and, surprisingly, three Republicans) would allow "paperless" kids who spent at least three years in Oregon high schools to pay discounted tuition at Oregon colleges and universities, whacking up to $17,640 off the annual cost of education.

According to the study, the bill would earn the system $23,490 in its first two years and then $943,467 from 2013 to 2015.

Although immigrant rights activists and students mostly overflowed two rooms, supporters also included state education and university bigwigs.

"Not only is this a moral imperative for the state, but it's an economic imperative," Oregon Department of Education Superintendent Susan Castillo told legislators.

"Many of these students have done very well in high school, but they hit a wall when they want to go to university," says Di Saunders, university system spokeswoman. "The cost of $20,000 to $25,000 a year for tuition is a hurdle they just can't cross."

Looking at 10 other states that have tuition equity laws, Oregon's university system estimates that 75 undocumented students would take advantage of the in-state tuition over the next four school years, even though Oregon immigrant rights group CAUSA believes that there are 44,000 undocumented kids in the state ["Paperless People," News, Dec 16, 2010].

Marcos (not his real name) is one of those students. His family brought him to Oregon from Mexico nine years ago and he graduated from a local high school in 2008. Now he's attending Mount Hood Community College on a scholarship (they didn't check his status) but hopes to study math at Portland State University (PSU) and become a professor. If the bill passes, he could afford to take PSU classes full time.

"It'll be a great opportunity for a lot of us who want to go to school," says Marcos.

Anti-immigration group Oregonians for Immigration Reform (whose slogan is "Advocating for an Environmentally Sustainable Level of Immigration") think the state's estimates are extremely low-ball and that undocumented students would flood to Oregon universities, costing the state millions.

"Taxpayers could be paying millions of dollars to subsidize the college education of illegal alien college students," member Cynthia Kendoll wrote on the group's blog.

At last week's overflow hearing, Republican Senator Frank Morse said he'd received more vicious phone calls about this bill than any other issue of his career. Morse actually spoke against the idea when it came up in 2003, but this time around he's a chief sponsor. "If we create a situation where we take a class of young people and deny them opportunity, are we improving Oregon?" Morse asked his fellow politicians. "No, we are not."