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No Tuition, but You Pay a Percentage of Your Income if You Find a Job
101–110 of 221 posts
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#102Australia 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…
Wouldn't you delay a raise or try to remain below 51 until you can make over 71 to avoid getting paid less?
The system looks good on paper. It reminds me of a type of public housing offered that allows you to give 30% of gross wages. Many people stop working completely and get welfare/assistance (to qualify you need to be working or getting a regular cheque) or delay raises, etc because the less you make the less you pay. The more you make the more taxes you pay so it creates a situation where the harder you work the less you make unless you can get a huge pay increase and leave. It creates a trap.. there is a huge fear of leaving because you will never get back in.
I like the free if you qualify German model but even that has problems.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#103Australia 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…
Biggest advantage by far: no extra paperwork.
As a student you give your tax number to the university, and then the loan repayments are handled by the tax system when you do your regular annual tax return.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#104Earlier quoted context omitted.
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.
To be clear, I’m a big fan of the value of community college, and I think one of the greatest shamed of our current education mentality is the status quo of getting into and paying for a 4-year university. Doing 2 years at a JUCO and transferring to a full
university is a path that would save many students tens of thousands with little detriment to their education.
That said, there’s still substantial differences between Lambda and a free year in college. For starters, if you have a poor GPA with a California Promise grant, it seems you have pay back the fees. Not sure what Lambda’s equivalent of a GPA is, but they don’t skim your salary if it’s below $50K. I think the more salient point is that the Lambda school has much more direct incentive to land you a good job, and ostensibly that incentive creates a stronger learning environment. Such direct incentive does not exist at a traditional state college, whether you’re paying tuition or getting a free year.
This is all a long way of saying that, while I don’t think Lambda is going to significantly impact the student debt crisis (st least in the near future), to say that they’re just putting a SV spin on the old idea of public education is overly facile.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#105Australia 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 link I sourced [1] answers this better than I can. Please give it a read. Although in conjungtion I would note that hardly any university-educated students would wish to live below 50k AUD (~35K USD) forever. I'm not sure that avoiding such a relatively small payment each year would be worth stunting your earnings growth. It could be possible, but I don't see why anyone would shoot themselves in the foot like this.
I understand your problem with the first benefit I have listed. Here are a few things to consider though:
1. Should a student be penalised for not making the best degree choice (most doing so at the age of 18 or so)?
2. Even if the degree choice is perfect for them (in a potentially risky profession), should one not be allowed to give it a go?
3. In university you see many students who have graduated, started working, decided they hated their profession, and then subsequently returned to university to reskill. Rising debt interest would have prevented many of these students from taking the new risk of changing industries. The threshold allows people to re-enter education without being drowned by their payments for the duration fo their degrees.
I agree with you that the arts are an important part of society. However, I don't believe that, given the chance, absolutely everyone would pursue them fully. I believe those who do embark on the potentially risky career of the arts should be allowed and supported to do so, as well as being able to change career paths if they so need.
[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
#106Earlier quoted context omitted.
In a word: incentives. It’s not about the payment structure alone, it’s about a school that is incentivized to make its students successful. IBR is just taxpayers swallowing the bill when schools fail.
But then such schools that predominantly work on ISAs, will pre-select for good students, who are most likely to succeed and also for industries where the compensation is higher. Remainder (which is arguably 90%+) of the students will still be at the mercy of other schools + taxpayer. It seems, this just provides one more payment option to students who are likely to succeed anyway and a refreshing business model for…
> But then such schools that predominantly work on ISAs, will pre-select for good students, who are most likely to succeed and also for industries where the compensation is higher.
That actually sounds like a good incentive structure to me. Most people shouldn't study something that will not give them some advantage (which these schools would select for).
If you struggle to make ends meet it wouldn't be a reasonable decision to study something unprofitable in the first place. I wish it was different and everybody could invest an infinite amount of time to learn what they are interested in, but in a resource constrained reality that's not possible and individuals have to make decisions that are advantageous for them.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#107This seems like a good way to focus universities on degrees and skills that are in demand in the work place. There is growing criticism that many academic programs lack rigour and aren't meaningfully related to the job market. Tying the success of the institution directly to the success of the students seems to be the ideal solution to that.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#108Earlier quoted context omitted.
Australians tend to stay in the same city for college, so room and board are generally not required. Most students live at home with their parents. All students have access to government assistance in the form of centrelink [1] (though centrelink is a beauracratic pain to get through), and out-of state students are entitled to more. In terms cost, UNSW is one of the top universities in the country. (EDIT: this is an…
> In terms of cost, UNSW is one of the top universities in the country. This is certainly the major difference.
For undergraduate studies, the federal government also subsidises classes at standardised rates depending on subject.
So no matter which university you go to you'll be paying the same "Commonwealth supported place" rate for your field of study. For engineering it's $9185/yr for what's usually a 4-year degree. [0]
Postgraduate study is strange because some universities charge full-fee, some offer commonwealth supported places for certain degrees, and some offer CSP as scholarships. My masters degree at UNSW for example was commonwealth supported so I only ended up adding $8k onto my loan for it.
[0] https://www.studyassist.gov.au/help-loans-commonwealth-suppo...
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#109Australia 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…
The key thing missing from this is the incentive for the education provider to provide courses that have real world demand, they get paid either way by the government and it's the rest of society that has to pay for that underwater basket weaving course.
Re: No Tuition, but You Pay a Percentage of Your Income if You Find a Job
#110Australia 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…
Wouldn't you delay a raise or try to remain below 51 until you can make over 71 to avoid getting paid less? The system looks good on paper. It reminds me of a type of public housing offered that allows you to give 30% of gross wages. Many people stop working completely and get welfare/assistance (to qualify you need to be working or getting a regular cheque) or delay raises, etc because the less you make the less you…
I addressed this in another comment more fully. For this version though, consider that even though it might be possible to do such a thing, the vast majority does not. You could potentially be sneaky about this, but the effort would not be worth the small savings you would make.
The current HELP/HECS system doesn't just work on paper. It's been used successfully for a while.
Remember, we are about repayments starting at 2% at 50k AUD (35K USD) and going up to 8% at $107+ AUD (77k USD). This is not a crazy, crippling payment. It is not worth making substantially less in your job in order to save such (relatively) small sums.
Australia is not a welfare state. We rank 5th in economic freedom [1] (USA is at 18). While the nation does have many problems, I do believe that Australia performs decently at balancing a free market and government support. While we used to have completely free universities, I believe that the current loan program is a decent midpoint between the US and European systems.