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As Student-Loan Debt Soars, Alternatives, Like Income-Share Agreements, Are On the Rise (theatlantic.com)
Last year, Lavell Burton, 36, wanted to learn to code, but was surprised to find that many of coding bootcamps cost several thousand dollars upfront. Then he found a 30-week remote program, Lambda School, that was free to attend. The program would provide comprehensive web-engineering training, and would help with job placement. Once employed, graduates would be required to pay back a set portion of their salary under an arrangement called an income-share agreement, or ISA. The Atlantic dives into such income share agreements. From a report: The concept of ISAs has been around since at least the 1950s, when the economist Milton Friedman outlined them as a hypothetical model of repayment. Yet ISAs were rarely implemented until the past few years, as student-loan default spiked and schools sought to offer other ways to pay. In 2016, Purdue University launched an ISA tuition option aimed at families who might otherwise take out high-interest private loans or Direct PLUS loans for parents to fill the gap between federal student loans and the cost of tuition. Purdue hired Vemo Education, a for-profit startup, to help design and administer the program, which is largely backed by the university's funds. The private schools Clarkson University and Messiah College have since announced plans to follow suit, as has the United States Collegiate Athletic Association, which has partnered with Vemo to create ISA options for its roughly 80 member schools.
Among for-profit programs, in 2012, App Academy, a coding bootcamp with locations in San Francisco and New York, began offering a twelve-week program built around an ISA. Others, like the New York Code + Design Academy, which provides a range of web engineering and design courses, and Holberton School, a two-year program in San Francisco, have similar payment options. [...] The ISA-based programs have generated hype, as well as some early success stories. Yet questions remain about whether they are a good deal for students and if they make for profitable businesses in the long run. For one thing, there's little consensus around how much is fair to reap from program graduates, and for how long. Lambda School, for example, requires graduates earning at least $50,000 to pay back 17 percent of their salary for two years, with total payments capped at $30,000. The terms can vary widely among programs. Also, while it's clear how programs like Lambda School might help some people improve their prospects, many of them are so new -- Lambda School is one year old this month -- that there isn't much data about how people do once they get through the programs. That makes it difficult for prospective students to evaluate them.
Among for-profit programs, in 2012, App Academy, a coding bootcamp with locations in San Francisco and New York, began offering a twelve-week program built around an ISA. Others, like the New York Code + Design Academy, which provides a range of web engineering and design courses, and Holberton School, a two-year program in San Francisco, have similar payment options. [...] The ISA-based programs have generated hype, as well as some early success stories. Yet questions remain about whether they are a good deal for students and if they make for profitable businesses in the long run. For one thing, there's little consensus around how much is fair to reap from program graduates, and for how long. Lambda School, for example, requires graduates earning at least $50,000 to pay back 17 percent of their salary for two years, with total payments capped at $30,000. The terms can vary widely among programs. Also, while it's clear how programs like Lambda School might help some people improve their prospects, many of them are so new -- Lambda School is one year old this month -- that there isn't much data about how people do once they get through the programs. That makes it difficult for prospective students to evaluate them.
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Computer schools have been around a long time. I remember seeing TV ads from Control Data Institute back the the 70s. Why is it so expensive now that you need loans, or these schemes, to pay it off?
The entire higher education system is borked, and this is just one more symptom. There needs to be a massive federal review of public universities, which should be existing for the public good, but are instead ballooning in cost just because they can. They want to act like (very inefficient) private companies, while at the same time, getting state and federal funding. That can't go both ways. People say that costs are going up because loans ensure that even the poor students can go to higher education (and they very well should have that ability) but university administrators choose to take advantage of that. It needs to stop. If the university administrators aren't going to do the right thing, they should be made to.
As an aside, universities should also get rid of all the adult daycare bullshit. I have to pay thousands of dollars every year in 'student activity fees' for the PhD program I'm in (Clemson, no problem naming & shaming). These fees are going toward things like 'Chocolate Milk Night,' 'Dave & Buster's Night,' 'Decorate a Mug Night,' and 'Tie Dye a T-shirt Night.' Not making that up, that's the sort of absolutely idiotic things people are going further into debt for.
It's as if millions of liberal arts college's voices suddenly cried out in terror and were suddenly silenced.
Have gnu, will travel.
Public College. Free.
Semester fees apply (approx. 50 euros/month), but since the student ID comes with free public transport in the entire state I'm actually faring cheaper than a non-student.
BTW: Did you know you can study for free in Germany, even if you're an USian? ... Just sayin'.
We suffer more in our imagination than in reality. - Seneca
First, you are clearly only talking about US universities since with a few institutional exceptions, most universities outside the US are not awash with lots of money. Second, your statements are precisely opposed to one another. You want universities to be focussed on the dollar value of the benefit to students and then want them to worry more about education and less about being a business.
The problem with universities today are the plethora of pseudo-universities which have sprung up to fill the void left by declining school standards. These new institutions offer dubious qualifications at great expense to the student and/or the government funding them. They find willing students only because many employers no longer trust school qualifications and now require degrees, diplomas etc. for jobs which never used to require them. Funding them by what is effectively indentured servitude is just going to make things a lot worse.
We need to fix this by raising school standards to the point where employers can use them for a wide range of jobs. While this will cost money it will also save a lot of money by making these pseudo-universities unnecessary.