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Income-sharing agreements let students trade future earnings for investment

bloomberg.com

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Re: Income-sharing agreements let students trade future earnings for investment

#141

Post by jedmeyers »

quentindemetz wrote: post #86
jedmeyers wrote: post #71

Earlier quoted context omitted.

> No one cares to help anyone else. If people in Europe cared to help their money would not have been taken by force via taxes.

« People in Europe » have elected politicians who have enacted these tax policies. Money is not being taken by force...

People with guns literally come to your house and put you in jail if you don't pay taxes. Not taken by force?

Can one person come to your house and take your money? Can ten? At what point it becomes "not by force"?

Re: Income-sharing agreements let students trade future earnings for investment

#142

Post by will_brown »

harryh wrote: post #137
will_brown wrote: post #132

Earlier quoted context omitted.

Fine how does tax funded vs loan funded vs private capital funded education align the interests of the school with the students? The students interest is getting an education, converting that education into employment, and not being indebted. The schools interest is revenue. The student would be best off with a free tax funded education and no debt, the school is best off with guaranteed federal loans allowing them t…

If a student with an ISA doesn't get a good job after graduation, the school gets nothing (or not much). If the student does get a good job, the school gets paid more. Thus the school is highly incentivized to make sure that their graduating students are highly employable. This is very different from the other systems where the school gets paid no matter what happens after graduation.

>If a student with an ISA doesn't get a good job after graduation, the school gets nothing (or not much).

The school isn’t the one making these deals (at least from the example in the article), private investors are entering into these agreements with students.

If the student doesn’t get a job the private investors don’t get paid, whereas the school has already been paid.

Re: Income-sharing agreements let students trade future earnings for investment

#143

Post by SkyBelow »

llamataboot wrote: post #101

Let's scale this up huge, let everyone take part, and have all of society invest in education and reap the rewards. We can call it "public education" and even capture the public externalities of having a well-educated population!

And watch the value of the college degree follow the trend of a high school diploma!

If we offered free college, how long before we start dropping the standards to earn a degree (for the same reasons we did so with high school diplomas) and have students waste even more of their lives in extremely sub par education environments?

Re: Income-sharing agreements let students trade future earnings for investment

#144

Post by jedmeyers »

Retra wrote: post #87
jedmeyers wrote: post #71

Earlier quoted context omitted.

> No one cares to help anyone else. If people in Europe cared to help their money would not have been taken by force via taxes.

You're assuming people don't see taxes as the preferred means of providing aid to those that need it.

Most people don't know and don't care where their taxes are going, because they were conditioned to behave this way from the early childhood. Ever wonder why government funded schools don't teach about fiscal responsibility?

Re: Income-sharing agreements let students trade future earnings for investment

#145

Post by rublev »

SkyBelow wrote: post #143
llamataboot wrote: post #101

Let's scale this up huge, let everyone take part, and have all of society invest in education and reap the rewards. We can call it "public education" and even capture the public externalities of having a well-educated population!

And watch the value of the college degree follow the trend of a high school diploma! If we offered free college, how long before we start dropping the standards to earn a degree (for the same reasons we did so with high school diplomas) and have students waste even more of their lives in extremely sub par education environments?

Why do you talk about this like it's a theory? Many parts of the world have free education. The value of a diploma is already largely meaningless unless you go to an ivy league school.

Re: Income-sharing agreements let students trade future earnings for investment

#146

Post by SkyBelow »

harryh wrote: post #119
will_brown wrote: post #117

Earlier quoted context omitted.

>the former closely aligns the incentives of the educator with the educated Do you think the school cares if you pay them using a federal student loan vs a group of private investors making payments on your behalf? How does one align the incentives of the school with students any more than the other? The only alignment of interests the school has with the students is when the student has a rich parent who could be a…

OP wasn't talking about funding the school via federal student loans, but instead via taxes which is why the inequality in my comment said "tax funded" and not "loan funded."

The investors will only offer the option when they think the combination of the student, the school, and the specific degree program will show a positive return on investment. This means that a school that does not offer the student an education that will enable them to make more money will not be considered as an option by the private investors.

In theory a government agency could do the same, but I think there is enough evidence that investors do a better job of investing their own money than government employees do for investing tax payer money.

Re: Income-sharing agreements let students trade future earnings for investment

#147

Post by dsfyu404ed »

daniel-cussen wrote: post #113
harryh wrote: post #109

Earlier quoted context omitted.

Student loans were much much smaller in the era you refer to (before 1976 when the law was changed). Behavior would be much different today with the much larger debts people take on.

Tuition was much much smaller in that era too.

Because it wasn't being inflated by billions of dollars of non-dischargable loans.

Re: Income-sharing agreements let students trade future earnings for investment

#148

Post by dsfyu404ed »

delfinom wrote: post #85
jostmey wrote: post #62

Earlier quoted context omitted.

And allow for students to file for bankruptcy on their student loans. That will force colleges to slash their insane budgets and stop building luxury dorms, new stadiums, and lay off the countless and unnecessary admins. Salaries for adjunct professors teaching the classes cannot get any lower, so the quality of education could remain about the same

The problem is the same as companies. Admins won't get slashed, but educators will. Then in many months to years later they wonder why they are on a sinking ship and fire more workers.

So let those institutions fail, or come precariously close. The hole is dug. Getting out will not be fun but we at least need to put down the shovel.

Re: Income-sharing agreements let students trade future earnings for investment

#149

Post by DoubleCribble »

rhizome wrote: post #131
rukittenme wrote: post #116

Earlier quoted context omitted.

> and ban charters. Why? What's the difference between publicly funded versus publicly funded and operated?

The purpose of charter schools is to circumvent equal access provisions and to break teacher unions.

Or to offer programs and incentives that the unions won't agree to such as: longer academic year, longer school day, merit pay, on-call duty, at-home visits, non-traditional facility, non-traditional pedagogy, poor performance termination, etc...

Re: Income-sharing agreements let students trade future earnings for investment

#150

Post by encoderer »

SkyBelow wrote: post #143
llamataboot wrote: post #101

Let's scale this up huge, let everyone take part, and have all of society invest in education and reap the rewards. We can call it "public education" and even capture the public externalities of having a well-educated population!

And watch the value of the college degree follow the trend of a high school diploma! If we offered free college, how long before we start dropping the standards to earn a degree (for the same reasons we did so with high school diplomas) and have students waste even more of their lives in extremely sub par education environments?

I have to assume this is sarcasm but if not: you’re about 30 years late.
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