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Fund college with income share agreements, not loans

By someone else   Feb 22, 5:26pm   13 links   1,430 views   17 comments   watch (1)   quote      

Student loan debt has reached crisis proportions, with well over a trillion dollars in student loans outstanding, crippling young people as they are starting out in life.

Many of these students got impractical degrees that did not help them earn enough money to pay off the loan, and are now stuck with debt they cannot pay or escape from.

A better idea is to fund college by promising a fixed fraction of one's income for a specified number of years,called an Income Share Agreement.

Instead of being a debt-slave with fixed payments to matter what your income, you can be absolutely certain that the debt will not be more than a known fraction of income and so it will always be possible to pay it, especially if that portion could be paid with pre-tax money.

Universities themselves should be the ones funding ISAs, not 3rd parties, so that universities have a direct financial motive as well as the direct ability to give students the best possible practical education and find them an excellent job. Universities should take some risk for teaching completely impractical subjects.

The ISA contracts themselves should be standardized by the government so that there is no risk of "terms may change" games being played.

Comments 1-17 of 17     Last »

1   Booger   Feb 22, 5:34pm     ↑ like (4)   ↓ dislike   quote    

How about working your way through college?

2   someone else   Feb 22, 5:36pm     ↑ like (1)   ↓ dislike   quote    

Not always practical. Some engineering degrees in particular require so much effort that you really can't work outside and get through it. And if try to alternate years and take time off, you forget things.

My dad did it though, finally graduating when I was about 5 years old.

3   zzyzzx   Feb 23, 8:52am     ↑ like (2)   ↓ dislike   quote    

Patrick says

Not always practical. Some engineering degrees in particular require so much effort that you really can't work outside and get through it.

I've worked my way through college twice and one of them was for an Electrical Engineering degree. It can be done!

4   Entitlemented   Feb 23, 8:59am     ↑ like (3)   ↓ dislike   quote    

Booger says

How about working your way through college?

I went in the Navy, I was a D'crat until about 22. The Navy taught me critical thinking, I took EE Elec Tech.

When I got to work on radios and radars at sea you grow up, and learn responsibility. I learned more tolerance in the Navy than any other job, because I met people from Chicagos south side, they really benefited.

I paid for EE with GI bill, and worked at API Alarm, for an Electrician, Signet Marine, and Rockwell Space Shuttle. All these made me a better engineer, and yes we all suffered in Electromagnetics, Laplace Transforms, Differential Equations.

I had no debt. As I looked at the liberal arts, I was sad that many did not know much more than a good High School student.

Verily, I tell you the US has been malinvesting in more than one way over the past 20 years.

5   someone else   Feb 23, 9:03am     ↑ like (1)   ↓ dislike   quote    

Lol, how many people on here have EE degrees? I do too, so that's three in a row in this thread. Not that I ever really used it. It's all been programming jobs since college.

My dad also went on the GI bill. Whatever happened to that? Seems like a great idea that got watered down to the point where it's not really there.

6   Entitlemented   Feb 23, 9:44am     ↑ like (1)   ↓ dislike   quote    

Patrick says

My dad also went on the GI bill. Whatever happened to that?

Who can plot the ratio of Welfare to GI bill costs from 1960 to 2016?

And even as expected if the GI bill in 1960 was 1/10th and 2017 ~ 1/1000th the welfare costs, what is the ROI of the GI bill vs Welfare.

A paper should be written on the Physics of hard work, sufferage and self sacrifice, and the properity of the US because of it.

7   NuttBoxer   Feb 23, 9:49am     ↑ like (1)   ↓ dislike   quote    

How about not giving colleges federal funding? Or making sure you tell your kids NOT to go to college unless it's necessary for their career.

8   BayArea   Feb 23, 10:58am     ↑ like (1)   ↓ dislike   quote    

Patrick says

Lol, how many people on here have EE degrees?

EE here too... lol

9   BayArea   Feb 23, 11:02am     ↑ like   ↓ dislike   quote    

Patrick says

A better idea is to fund college by promising a fixed fraction of one's income for a specified number of years,called an Income Share Agreement.

Is there enough incentive for the worker to work up to their potential during that specified number of years? I guess there probably is. The higher their income, the more they pay but the more they keep too.

10   someone else   Feb 23, 11:09am     ↑ like   ↓ dislike   quote    

Yes, as long as the percentage is not too onerous or the duration too long.

It would also help to make the payback percentage come out of pre-tax money.

11   Entitlemented   Feb 23, 3:01pm     ↑ like (2)   ↓ dislike   quote    

Ironman says

Make that four in this thread. I also have a ME degree too.

Was wondering why you guys were so smart; take the rest of the day off.

12   Entitlemented   Feb 23, 3:29pm     ↑ like   ↓ dislike   quote    

Talk about minorities...........

13   zzyzzx   Feb 23, 3:58pm     ↑ like (1)   ↓ dislike   quote    

Patrick says

Lol, how many people on here have EE degrees? I do too, so that's three in a row in this thread. Not that I ever really used it.

I worked at an electric utility at a steel mill, then used to design and build electric power plants, after that I worked as construction management for the electrical part in a huge waste water treatment plant. None of the jobs I had lasted very long; they were all project related, and when the project was completed they laid everybody off. That and when employers figured out that you didn't need to speak English to do traditional engineering the wages dropped like the proverbial rock. If they can hire a Russian straight off the boat for $8.50/hr, why would they ever hire an American again? Yes that's a true story; I worked with this Russian. Anyway, I did this for 10 years, moved frequently, and was usually unemployed in-between jobs. The most I made as an engineer was 45K.

14   Dan8267   Feb 23, 4:32pm     ↑ like   ↓ dislike   quote    

Patrick says

Fund college with income share agreements, not loans

I hate this idea for the following reason.

1. College is forced onto young professionals as a requirement for entering the skilled workforce, even on people who are self-taught like every good software developer. I didn't go to college to learn. I knew far more about software development than any college professor before I left high school. I did not learn anything in college from classes that I could not have just as easily, and more quickly, learned on my own. I continued to teach myself during college, but I did not need college to learn new things. The only reason I put up with college was to get that stupid degree that is a prerequisite for employment.

Now why should a younger person similar to me have to give up a percentage of his income for N years or life just to get a degree? It's not that college is adding value to his skill set. It's that it's imposing it's approval on his career prospects. I would find requiring this person to pay a long-term tax on his work to some college to be very unethical and counter-productive.

2. Although it might help those who choose low paying fields, it would definitely punish those choosing more productive work. This would encourage all the wrong career choices and would greatly decrease economic productivity as STEM is discouraged and women's studies is encouraged.

[stupid comment limit]

15   Dan8267   Feb 23, 4:32pm     ↑ like   ↓ dislike   quote    

3. We live in the Information Age. Knowledge is, by definition, data. (Granted the converse, data is knowledge, is not true.) Transmitting information in the Information is essentially zero cost. The cost, not just the price, of education should be damn close to zero per student. If it's not, you are doing it wrong. So there should be no need for loans or indentured servitude, which is what you are proposing.

16   Dan8267   Feb 23, 4:41pm     ↑ like   ↓ dislike   quote    

Counterplan: Run a single, national, virtual university and social the costs, which if done right, would be about $1 per student per course plus about $100 to $400 fixed cost per student regardless of the number of courses taken in his lifetime.

No need for loans. The cost is small enough to socialize. Society benefits far more than the costs, and thus it is in societies interests that people take as much advantage of this education as possible.

Downside: massive unemployment for teachers, janitors, administrators, and other unnecessary workers. Those people will have to be retrained to hold other, more productive jobs.


1. The entire cost of a hundred years of educating everyone in society will be less than the current costs of one year of educating all the students today.

2. Standards will be higher and consistent. They can be improved with time, and any problems fixed once.

3. Improving the system is much faster and easier. With a single system that scales, all it takes is a small group of smart people rather than the hordes of people required to simply maintain the current system. This means you can spend lavishly on improving the system and it's still a minuscule per student cost.

4. Absolutely no inequality of opportunity. It does not matter where you live, how rich you are, your gender, your race, or anything else. Everyone has the exact same access to all education. There is no way you can remotely approach this level of equality with physical schools.

[stupid comment limit]

17   Dan8267   Feb 23, 4:47pm     ↑ like   ↓ dislike   quote    

5. Asynchronous schooling allows for better student performance at all levels. In the current system, dumb students can't keep up with average students and they suffer. Meanwhile, the best students are held back by average students. With a virtual university, you have no classmates. You proceed in each course and each program at the pace that works best for you. If you are quick in one subject and slow in the other, the only thing that changes is how fast you complete the course rather than how well you do or how much you learn.

6. Economies of scale. We can increase the number of students and courses without limit.

7. Proper measuring. All students are measured by the same scale and you can make accurate comparisons regarding them.

8. Treasure trove of data mining opportunities. You can study how people study and improve the system in ways you could not possibly do with physical schools.

9. Predicting future economic output. You can proactively determine whether we are producing enough or too many of any given profession.

10. No more "campus rape" and SJW bullshit interfering with education and launching careers. We can always have a separate institution for facilitating orgies and fornication. The demand of young adults for sex should not be married to the mechanism that is preparing them for careers. The institution that prepares you for your career and the institution that gets you laid should not be the same entity.

There are probably more advantages, but that's just off the top of my head.

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