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No Tuition, but You Pay a Percentage of Your Income if You Find a Job

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Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#81

Post by voidlogic »

nthot wrote: post #74
atiredturte wrote: post #48

Australia 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 increasin…

Is it stepped at all? Do you owe nothing before 50k and then once you cross that threshold you now owe money? That would seem to incentivise staying below that threshold for a percentage of borrowers. I also have difficulty seeing the first benefit you list as being a benefit. I don't have a problem with people pursuing degrees in fields that aren't big money makers, but I also don't know that the government should b…

>That would seem to incentivise staying below that threshold for a percentage of borrowers.

That only makes sense if its not implemented like taxes are. For example if when you exceed 50k and your repayment rate for the first 10k of income past 50k is 2%, and you earn 59k, you would take home $58,820. Why would you not want to take home this extra income.

Is of course is assuming it works like taxes in the US (which it probably does). The same kind of bad logic occurs in the US when people won't take a raise because they don't want to "jump tax brackets", but they don't realize you only pay the higher bracket rate on the income that was in that bracket!

Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#82

Post by throwawayjava »

atiredturte wrote: post #48

Australia 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 increasin…

> ~$19k USD

Was this with room and board? FWIW, there are many college degrees in the USA that are in the $7k/yr range, and many of then were around $20k total prior to the last round of state-level austerity in the USA.

Getting a US college degree for under $20k is still very possible if you a) commute and b) do the first two years at a community college (typically closer to $2k/yr, or $18k-$21k for 2 years cc + 2 years state college).

With a bit more public subsidy (or differently targeted subsidy), many US colleges could be well within the $20k USD range for commuting students. And some courses of study already are.

Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#83

Post by princekolt »

austenallred wrote: post #10
chrisamiller wrote: post #6

So 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.

That's effectively how tax brackets work in several countries that have a null tax rate for people in the lowest income bracket. So only after you reach the next bracket you start paying any income tax.

Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#84

Post by austenallred »

malshe wrote: post #79
austenallred wrote: post #76

Hey, co-founder of Lambda School here. Yes, some countries have similar structures, where you pay after a certain threshold. The difference is: 1. In those structures the school gets paid no matter what, the taxpayer just swallows the cost. With Lambda School we will literally go out of business if a large percentage of our students don't get jobs. That causes a lot of stuff. For example, we have an entire sales team…

Congrats on the funding! I think that this is a viable model for professions where high paying jobs are available aplenty. How are you planning to scale with this narrow model? Also what is your competitive advantage? I am trying to figure out the valuation as an investor.

Valuation is in the NYT article :)

The model scales very well. We move people from low(er) income to high(er) income. That’s how it should be, and there’s a whole lot of that to be done.

Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#85

Post by IMTDb »

austenallred wrote: post #76

Hey, co-founder of Lambda School here. Yes, some countries have similar structures, where you pay after a certain threshold. The difference is: 1. In those structures the school gets paid no matter what, the taxpayer just swallows the cost. With Lambda School we will literally go out of business if a large percentage of our students don't get jobs. That causes a lot of stuff. For example, we have an entire sales team…

It might be cynical but it seems you are moving from a bad system to another bad one.

In the current system, students are the customers, in your new systems, students are the products.

How will you ensure that your private interest are aligned with individuals, and society needs ? You are currently avoiding that issue by targeting high demand/high paying jobs but on a larger scale those issue will arise

Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#86

Post by CJefferson »

nthot wrote: post #74
atiredturte wrote: post #48

Australia 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 increasin…

Is it stepped at all? Do you owe nothing before 50k and then once you cross that threshold you now owe money? That would seem to incentivise staying below that threshold for a percentage of borrowers. I also have difficulty seeing the first benefit you list as being a benefit. I don't have a problem with people pursuing degrees in fields that aren't big money makers, but I also don't know that the government should b…

The payments work the same way as tax brackets, so say 10% of your salary above 50k. Would you keep your salary lower to stay in a lower tax bracket?

Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#87

Post by jboles »

nthot wrote: post #74
atiredturte wrote: post #48

Australia 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 increasin…

Is it stepped at all? Do you owe nothing before 50k and then once you cross that threshold you now owe money? That would seem to incentivise staying below that threshold for a percentage of borrowers. I also have difficulty seeing the first benefit you list as being a benefit. I don't have a problem with people pursuing degrees in fields that aren't big money makers, but I also don't know that the government should b…

> Is it stepped at all? Do you owe nothing before 50k and then once you cross that threshold you now owe money? That would seem to incentivise staying below that threshold for a percentage of borrowers.

You make no repayments below 50k but it when it kicks in starting at 50k it's something like 1.5% of income, with increments as you earn more. Combined with the fact that it's (1) real-interest free, (2) payments are collected by the Tax Office and automatically added on to your tax bill, and (3) Australia is really expensive, there's not much incentive to stay below 50k just to avoid paying it. Historically there have also been large discounts (10-20%) just for voluntarily paying it early too.

Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#88

Post by austenallred »

IMTDb wrote: post #85
austenallred wrote: post #76

Hey, co-founder of Lambda School here. Yes, some countries have similar structures, where you pay after a certain threshold. The difference is: 1. In those structures the school gets paid no matter what, the taxpayer just swallows the cost. With Lambda School we will literally go out of business if a large percentage of our students don't get jobs. That causes a lot of stuff. For example, we have an entire sales team…

It might be cynical but it seems you are moving from a bad system to another bad one. In the current system, students are the customers, in your new systems, students are the products. How will you ensure that your private interest are aligned with individuals, and society needs ? You are currently avoiding that issue by targeting high demand/high paying jobs but on a larger scale those issue will arise

How are students the products now? We only get paid when they are successful, that doesn’t mean they’re not the customer.

The service we provide is helping them into a good job, so of course hiring companies are stakeholders, but companies are the customers.

Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#89

Post by nsfmc »

danso wrote: post #67
chrisamiller wrote: post #6

So 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.

Where is post-secondary education free in the U.S.?

in california, you can apply to get your first year of community college free ( https://home.cccapply.org/money/california-college-promise-g... ), there's an assembly bill ( http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?... ) which would add a second year to that.

Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job

#90

Post by [deleted] »

nthot wrote: post #74
atiredturte wrote: post #48

Australia 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 increasin…

Is it stepped at all? Do you owe nothing before 50k and then once you cross that threshold you now owe money? That would seem to incentivise staying below that threshold for a percentage of borrowers. I also have difficulty seeing the first benefit you list as being a benefit. I don't have a problem with people pursuing degrees in fields that aren't big money makers, but I also don't know that the government should b…

[deleted]
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