No Tuition, but You Pay a Percentage of Your Income if You Find a Job • Hacker News Board

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

#111

Post by ibeckermayer » Wed, Jan 09, 2019, 12:21 AM UTC

twblalock wrote: post #70

> At Lambda, students pay nothing upfront. But they are required to pay 17 percent of their salary to Lambda for two years if they get a job that pays more than $50,000. This appears to create a cliff: If you make $50000 a year, you keep $50000 a year. If you make $51000 a year, you pay 17% ($8670) and you keep $42330. That extra dollar cost you a ton of money. It really ought to be a marginal rate like tax brackets.

There is a cliff, as a person with an ISA with a similar program (Holberton School), there's really no disincentive to seek a high paying job. The ISA doesn't expire, if I'm making below the threshold then it just gets deferred until I make above the threshold.

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

#112

Post by atiredturte » Wed, Jan 09, 2019, 12:22 AM UTC

CJefferson wrote: post #86

nthot wrote: post #74

Earlier quoted context omitted.

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?

Please read the link provided [1]. The percentage is not high enough to purposefully keep your salary lower.

[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

#113

Post by ibeckermayer » Wed, Jan 09, 2019, 12:25 AM UTC

rland wrote: post #31

We're asking the wrong questions. A full semester at my local community college is under $1000. Extrapolating to four years of undergrad education, that's $8,000 total. WHY do we need this never ending whirlpool of sophisticated financial schemes to take care of this problem?

But would a community college degree give me as high a level of education in as short of a time period as I got from Holberton (a similar program to Lambda School)? With an ISA, the profit incentives of the education provider and the student are directly aligned, so education providers are more incentivized to innovate and provide greater value.

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

#114

Post by ibeckermayer » Wed, Jan 09, 2019, 12:27 AM UTC

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.

Public education is non-optional: when the public school systems suck, we still have to pay for them. Yes there is a democratic process to change that, but the average individual does not have much sway over that process and in effect it is much more difficult and sclerotic.

If Lambda School begins to suck and isn't educating engineers to competency, they go out of business quickly. Voluntary vs involuntary funding is an incredibly important difference.

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

#115

Post by TheRealPomax » Wed, Jan 09, 2019, 12:36 AM UTC

MagicPropmaker wrote: post #91

gigatexal wrote: post #24

Earlier 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…

It doesn't just _look_ like income. It is income. If I give you $100 as a loan then change my mind and say 'you can have it', you just made $100.

What if we turn it into something a little more analogous, and I loan you $100, and you use that $100, and I never asked for it back, but 12 years later go "actually you know what, never mind about paying me back", that's not $100 you now have. That's $100 you had 12 years ago. But we also need to make sure to keep the analogy in the same ball park, not the same county, so when we're talking $100, the tax on that isn't going to bankrupt you and it's a bad analogy. Let's up that by a factor of 500 instead: when we're talking a full student loan, if I say "actually, keep it", I literally just bankrupted you for kicks, and you should have had some kind of legal protection that prevented me from ruining your life on a whim.

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

#116

Post by rayiner » Wed, Jan 09, 2019, 12:50 AM UTC

ChrisLomont wrote: post #78

rayiner wrote: post #43

Earlier quoted context omitted.

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.

Do you have a source? Every one I find states the numbers I posted above, no where near your number. Total federal and non federal combined is currently around $100B annual.

I guess my number is a bit dated. It's $95 billion in federal loans in the most recent year, but it peaked at $117 billion in 2010-2011. https://trends.collegeboard.org/sites/default/files/2017-tre... page 9. Still, the DOE budget cannot reflect that since it is much less.

Non-federal loans account for 11% of loans: https://trends.collegeboard.org/student-aid/figures-tables/t....

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

#117

Post by IMTDb » Wed, Jan 09, 2019, 1:03 AM UTC

austenallred wrote: post #88

IMTDb wrote: post #85

Earlier quoted context omitted.

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.

The university has an incentive to value your early salary _above all else_. This may be dangerous (hence my question). The article clearly shows some potential issues by pointing to several very useful but not very well paid profession (eg: nurses) who will have trouble finding lessons in this model.

Closer to our trade you might see stuff like :

- We don't offer design lessons because backend developers earn more than designers, so go study Rust, it's so hot right now !

- Marketing ? Heck no, salaries are only soaring later in your career, we can't get break even with that

- Your idea of a quantum computing course seems interesting but we don't believe there is a big enough market for people in that field at the moment, it's more of a research subject right now (weather that's true or false is up to the reader to decide).

- ...

Since the university is exclusively paid by your future salary, every second that you spend in class must be immediately translated in extra $$$ in you first compensation package. If your goal is to make as much money as soon as you get out of school, your incentive are aligned. Otherwise they are not, and that can be dangerous. Steve Jobs is a notorious example of someone who took some lessons that did not seem really useful not so high profile at the time, and only later proved to be critical in his success.

At a much smaller scale, 7 years after graduating, I am rediscovering some skill/knowledge I acquired at uni that did not seem to matter a lot when I started working (and that definitely were not taken into account in my first job interviews). I believe they makes me a better/more productive engineer. I fear that under that new system I might have never learned them in favour of something hotter and more marketable.

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

#118

Post by YeGoblynQueenne » Wed, Jan 09, 2019, 1:17 AM UTC

>> What if there were a way to eliminate student debt?

The obvious answer would be "free higher education", like in most EU countries and I believe many non-EU countries, have, and like many US institutions offered in the past.

Unfortunately what is being proposed is insted baptising debt by another name, so that it doesn't sound like debt.

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

#119

Post by wolco » Wed, Jan 09, 2019, 1:36 AM UTC

atiredturte wrote: post #110

wolco wrote: post #102

Earlier quoted context omitted.

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…

Economic freedom rank is a bit confusing. Comparing Canada to US the tax burden is listed at 65 for the US and 76 for Canada. Comparing income taxes, capital gains, local/provincial/state the US is much lower.

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

#120

Post by simplecomplex » Wed, Jan 09, 2019, 1:48 AM UTC

twblalock wrote: post #63

simplecomplex wrote: post #38

Why not just let the market do what it wants? That’s how we got Lamda School in the first place. That way there could be income-sharing schools like Lamda School for trades that make financial sense. For degrees that don’t make financial sense, students could pay for them upfront, as many already do. The government never had to be involved with financing higher education to begin with.

> The government never had to be involved with financing higher education to begin with. The government needed to become involved to make education affordable to students without wealthy parents. If the market was going to take care of that by itself, it would have happened before the government got involved.

Affordability has gotten worse since the government started giving loans. The non-wealthy students still have to pay their tuition.

I think you might mean accessibility. Government loans do expand access, but so does the private income sharing model. There are market-based ways to serve the poor education, and arguably where it does it’s more affordable, and incentivized to lift them out of poverty.