This isn't new, we do this in the UK and it's still rubbish (but arguably better than having a $200k student loan balloon from interest while you're pouring coffee). Someone correct me if I missed something.
No Tuition, but You Pay a Percentage of Your Income if You Find a Job
41–50 of 221 posts
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#42While interesting, this is not a new approach.
I graduated from App Academy in San Francisco over 5 years ago, paid a percentage of my income for 6 months in my first engineering job, and after roles at Stripe and Bain Consulting, have never looked back.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#43Earlier quoted context omitted.
Because when the loan is forgiven after 20 years it looks like income. So you have to pay tax on your forgiven loan. If Lambda School can’t teach you well enough that you get and keep a good paying job then they take the loss not the tax payer. Also: advocating for keeping the old system by saying this new way is not different is the least Hacker News things I’ve ever heard. The student loan crisis is an existential…
>they just lure students to the school helping them fill out student aid and loans and then give them subpar educations with curriculum being taught like it has been for years but they don’t care to change or innovate because the school has already been paid by an entity — the US education department who has deep pockets. Total tuition loans outstanding is around $1.5T. Total US Education Dept annual budget, 70B. Med…
The DOE budget doesn’t include disbursed student loans. These days, the DOe disburses over $120 billion in loans per year. Almost all student debt ($1.33 trillion of $1.5 trillion) is Federal government issued.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#44This is replacing student debt with student equity. Here's some thought on debt and equity: https://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theo... AKA the "capital structure irrelevance principle." My thoughts for some reason wandered that way, but I was actually going to address another issue: as long as it's expensive to go to college, you can't win. There's no free lunch. If college were cheap, you could…
Where do you see "equity"?
This is replacing a student loan, with a no barrier of entry, no approval needed, student loan.
If the housing market is any example of what happens when entry is eased (low % rates, etc), we are looking at student loans being a lot higher than they are now.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#45Sounds like Unbounded Solutions/BrighterBrain. I told those scumbags where they can stick it more than once.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#46While interesting, this is not a new approach. I graduated from App Academy in San Francisco over 5 years ago, paid a percentage of my income for 6 months in my first engineering job, and after roles at Stripe and Bain Consulting, have never looked back.
Out of curiosity, does Bain hire a lot of web developers?
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#47How is this different from income-based repayment of federal student loans? While there are different programs, the general idea is that you pay 10% of your "discretionary" income for 20 years with the guarantee that your payments aren't higher than the 10-year payoff rate. The article doesn't really have information on the Purdue system other than saying that it might cost high-earning students 250% of the price of…
Be aware of IBR and the promise of loan forgiveness. These are relatively new programs and the first batch of people taking advantage are actually people who work in public service/non profit (whose loans get...or are supposed to get forgiven after 10 years).
There are significant numbers showing the loan servicers engaged in fraud to prevent the forgiveness. One of the major loopholes is on an annual basis when income documents are due, the loan servicers would take extended periods to “review” the income docs and place the loans in forbearance for a month. Then when forgiveness time came they were denied for not having made payments (through no fault of their own) for 120 consecutive months essentially resetting the clock every year.
Not to mention at any given point these programs can be axed, which I’m sure they will be if there were ever a significant portion of the population who would actually qualify for the forgiveness.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#48Australia has a system that, while different, has similar perks to this. We have a government loan system called HELP (formerly HECS).
Basically students can get a zero interest government loan (rises with inflation), and only need to pay it off once they make above a certain threshold ($51,957 according to the official website[1]). The payments are deducted as a percentage of your income, with the payments increasing with your wage.
This has a number of benefits:
1. Students whose degrees don't work out for them (i.e. can't find meaningful employment) aren't stuck with rising interest on their debts.
2. Allows poorer students to go to uni without parental support (I am currently a student and support myself entirely)
3. Reduces pressure on graduates to find a job just to pay off their debts. They can take their time to find a good job in their industry, rather than working lower-paying, unrelated work to pay off their loans.
My degree at UNSW in Australia will cost about $27k AUD (~$19k USD) and I'm unsure about the costs of others in my country. Under the HELP system, Australians are allowed a fair go at an education, and can take their future into their own hands (rather than relying on their parents).
[1] https://www.studyassist.gov.au/paying-back-your-loan/loan-re...
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#49I like the concept that the mining industry has developed. Its calle NSR ( net smelter return). A company will loan money to another miner that has a deposit but lacks money. The miner will use the money to build the mine and when they send their ore to the smelter, will pay back a percentage of the value of that ore to the company that loaned the money.
Replace miner with student. Company issuing the NSR with teachers.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#50Earlier quoted context omitted.
> The big issue is for universities is how they would handle marriage. I don't see why this is an issue at all. If the college claims that "finding the high-income person you will marry" is one of the reasons to attend that college, then they should please return to the 1950s (or earlier!). If they DON'T, then the repayment should be based on the individual's income, regardless of their spouse's income. Does this mea…
I've heard professors argue that college as a physical location is only useful for meeting people, and the learning itself was not even relevant. I don't think this is a 1950s outlook.
Meeting people is useful for education & learning.