IMO a great idea and could flip the table on ivy league schools and other institutions that favor political connections over an individuals potential.
No Tuition, but You Pay a Percentage of Your Income if You Find a Job
51–60 of 221 posts
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#52Good. This does exactly what Nasim Taleb argues and forces the college to have "skin in the game." Education needs this sort of revamp badly. Government meddling with student loan guarantees caused the price inflation, more government meddling won't solve the problem. The system needs a reboot, and this sounds like exactly what it needs. Don't pay unless you make over 50k, awesome. Payback lasts 2-3 years, awesome! I…
>Good. This does exactly what Nasim Taleb argues and forces the college to have "skin in the game."
This philosophy operates under the assumption that colleges should be beholden to an economic system that values individuals solely for their ability to grow existing capital.
It's a recipe for cultural stagnation.
Where do we develop entirely new modes of thought and expression [and potential new sources of wealth] if we deprioritize every activity other than those that optimize for the growth of existing wealth?
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#53So you get an education for free, then pay back into the system after you're in the workforce? Congratulations, silicon valley, you've just re-invented public education! Imagine what our public universities could look like with solid funding increases (which would be a fraction of that 17% that this group wants to take). They could be both free and amazing.
Yeah, I feel like this model is a form of private taxes that is more ripe for abuse. Just do it bigger and more efficient (and with transparency and oversight) with public education.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#54Earlier quoted context omitted.
>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 debt is from private lenders, who do have incentive to ensure borrowers pay back. Not necessarily. Private banks issuing federally-backed student loans want you to default, because then they double their money. See here: http://www.collegescholarships.org/research/student-loans/
Your link doesn’t show how a defaulted loan is more valuable to a private bank than a performing loan. It would be more accurate to say private banks are relatively indifferent to the performance of a loan. (They’re actually marginally incentivised to collect performing loans, since that is a cross-selling opportunity.)
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#55This is an interesting idea and generates a lot of questions.
How does this change the dynamic of 'going back to school' for an alternative degree? If the domain I initially studied starts hurting economically and I have to get a different degree, do I still owe the school for my initial degree if I get a job that meets the income threshold off my second degree? How do we determine which degree netted me my current job? (assuming I get the new degree and a job within the N year period during which I owe the initial institution a percentile of my income).
Am I able to 'pay out' at any time? Or, if I get a better paying job, does the institutions paycheck increase if I'm still in the payback time interval? Do I simply need to pay the pay cap?
Should I be comfortable with the notion that my institution is x% responsible for my wage-earnings and overall economic worth? Are there situations in which this isn't the case?
Does this change promote student assessments that are better or worse for the edification of the next generation? As the article states, would schools be tempted not to bother with 'high-risk' students? What does it mean to put a label like 'high-risk' on a student? What does it mean to treat a human being like an investment? Does this reduce interest in students to purely economic terms (a big part of how universities already conceive of their students today, but reputation to some degree still factors in)? Would such a model further exacerbate the gap between the wealthy and poor—would wealthy kids, who grow up in environments that promote study and make them 'low-risk' investments (likely to succeed) have an unfair advantage over kids growing up in poor households?
This also seems to imply that one's learning is the majority of what factors into one's getting a job. What about all the additional work it takes to get a job (networking, etc.) Will these institutions assist in these areas as well?
What of the notion of scholarship? Is it absent in this model?
Does this model actually work for all disciplines? Arguably, it creates a very tight coupling between the 'value' of an education and wage-earnings/income. What of those pursuits that seem to be valuable, in a different light and aren't (today) usually high-income generators ,e.g. the study of history, literature, and cultures, for instance. What will happen to those disciplines under this model? Is this a model that's more appropriate for trades and not all areas of education?
Seems like a very good change, potentially, but it will probably a lot of effects if its adopted nationwide, on both an economic and cultural level.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#56How 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…
> 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…
That's a pretty easy system to game. Got loans you can't afford to repay? Quit your job and claim to be unemployed, so you can stop paying your loans and live off your spouse's income.
A lot of people who can't pay their loans are in low-paying jobs they don't like, so this would be a very tempting option indeed.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#57So you get an education for free, then pay back into the system after you're in the workforce? Congratulations, silicon valley, you've just re-invented public education! Imagine what our public universities could look like with solid funding increases (which would be a fraction of that 17% that this group wants to take). They could be both free and amazing.
"Imagine what our public universities could look like with solid funding increases" The reason we're having this conversation in the first place is precisely the "funding increases" they've been experiencing. If this isn't enough "funding increase" for them: https://rpreschern.files.wordpress.com/2013/09/college-tuiti... then I'd have to suggest "funding" is not their problem. What they'd look like with "solid fundin…
Thank you for posting this. As in healthcare, the problem isn’t so much the inability to pay as it is that costs spiraling out of control for no added value.
Prices tend to do this is a supply constricted market when demand is artificially boosted by government subsidies.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#58So you get an education for free, then pay back into the system after you're in the workforce? Congratulations, silicon valley, you've just re-invented public education! Imagine what our public universities could look like with solid funding increases (which would be a fraction of that 17% that this group wants to take). They could be both free and amazing.
The 17% is capped at $30k and only happens if the student gets a job that pays $50k+. If the student doesn’t get a job that pays $50k+ the school makes $0. If universities had that tuition plan they would be bankrupt.
Or, instead of bankrupt, they would likely focus on degrees that were marketable in the current economy. I feel that this option would really reduce the number students in some degree programs that aren't directly employable, or at least not at high wages.
Universities could offer this today in some programs (CS, medicine, law, etc). But what about arts programs? Music? Are these employable enough to incentivize a University to to take a chance on students ability to repay?
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#59This 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.
The "school" is "buying equity" in the student (which may or may not end up being worth something).
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#60Earlier quoted context omitted.
What school is that? That’s very low.
One that's heavily subsidized by its community, the same way most public universities in the United States used to be. The neverending slashing of education funding at the state level has led to sky-high student debt which leads to bad ideas like this one.
I still have never seen tuition that low, even subsidized