Slashdot Mirror
No Tuition, but You Pay a Percentage of Your Income (if You Find a Job) (nytimes.com)
What if there were a way to eliminate student debt? No, really. Student debt reached a new height last year -- a whopping $1.5 trillion. A typical student borrower will have $22,000 in debt by graduation, according to the National Center for Education Statistics. Now, Silicon Valley is backing a novel idea that proposes to rewrite the economics of getting an education.
From a report: The concept is deceptively simple: Instead of charging students tuition -- which often requires them to take out thousands of dollars in loans -- students go to school for free and are required to pay back a percentage of their income after graduation, but only if they get a job with a good salary. The idea, known as an Income Share Agreement, or I.S.A., has been experimented with and talked about for years. But what's happening at Lambda School, an online learning start-up founded in 2017 with the backing of Y Combinator, has captivated venture capitalists.
On Tuesday, Lambda will receive $30 million in funding led by one of Peter Thiel's disciples, Geoff Lewis, the founder of Bedrock, along with additional funds from Google Ventures; GGV Capital; Vy Capital; Y Combinator; and the actor-investor Ashton Kutcher, among others. The new funding round values the school at $150 million. The investments will be used to turn Lambda, which has focused on subjects like coding and data science, into a multidisciplinary school offering half-year programs in professions where there is significant hiring demand, like nursing and cybersecurity. It's an expansion that could be a precursor to Lambda becoming a full-scale university.
On Tuesday, Lambda will receive $30 million in funding led by one of Peter Thiel's disciples, Geoff Lewis, the founder of Bedrock, along with additional funds from Google Ventures; GGV Capital; Vy Capital; Y Combinator; and the actor-investor Ashton Kutcher, among others. The new funding round values the school at $150 million. The investments will be used to turn Lambda, which has focused on subjects like coding and data science, into a multidisciplinary school offering half-year programs in professions where there is significant hiring demand, like nursing and cybersecurity. It's an expansion that could be a precursor to Lambda becoming a full-scale university.
"and are required to pay back a percentage of their income after graduation"
That just sounds like slavery with extra steps.
In the 80's when I applied to expensive colleges, some (yale, IIRC) described a very similar financial aid package to me.
How much of that debt is for vocational schooling? That seems to be all that this would address. I wouldn't want it any where near a normal University, for fear it would kill off the less lucrative subjects.
Strange things are afoot at the Circle-K.
So basically this is HECS (or whatever they call it now) in Australia....
Million dollar salaries and billion dollar campuses.
In every state in the U.S. -- without exception -- the highest paid public employees are:
(a) President of a state university
(b) Head coach of a state university sports team
It is called - taxes.
If we add financial/risk-taking institution into the picture. College still get funded up-front, but risk-taking institution can "buy" the income stream by funding kids that they think will do well in the future, by giving these kids "scholarship' if they choose to accept. The contractual rate, structure will be negotiated.
If you owe someone something (even if it is a percentage of your earnings) that is a debt.
That used "peer instructors"
I love the scam
You already pay a percentage of your income if you have a job. This proposal is a matter of budgeting your taxes to fund education. It's plain and simply that.
are all costs coved / rolled in to the plan? or is room, books, fees need there own loan?
Debt is usually a fixed payment, the percentage of your income goes up and down based on what your income is.
So no, not the same.
I hate fat people.
I wanted to call it "The Institute."
I'm glad someone with means is exploring the merits / shortcomings.
Read the fine print.
1. They say you have to pay them 17-20% of your earnings for _ANY_ job, even if you didn't get that through what they taught you.
2. They do their own financing because they're not an accredited institution, so you can't even use that "degree" elsewhere.
3. They were forced to remove "University" and "Professor" from their language, as those terms were not being used correctly.
4. This is just a bootcamp that charges you $20,000 (up front) or $30,000 (through this scheme) for a 30 week MOOC.
5. Even though they have a $50,000 minimum salary before you have to start repaying (which is deferred for several years until you are at that point), they don't adjust for cost of living. Someone in California or New York (where they hold their schools) will make that and still be below the poverty line.
6. Their success stories are suspect. There was one guy who they claimed landed a full-stack developer position, without also pointing out he had a bachelor's degree, and he had participated in a year-long bootcamp before doing this one.
student athlete scholarship should have the same thing! with funds being used to help others pay for school.
Oh wait, it looks EXACTLY LIKE THE METHOD THE UK USES for its student loans repayments. In the UK you're charged a max fee for tuition and the student loans company gives you a student loan to cover that and maintenance which is calculated so there are limits that people can get. You repay the student loan once you start earning over £480 and it is deducted from your pay at a rate of 9% of everything over the £480. After 30 years anything unpaid is written off.
More info here: https://www.gov.uk/repaying-yo...
I only please one person per day. Today is not your day. Tomorrow isn't looking good either. - Scott Adams
This is well intentioned, but misguided. Here's why:
We already have a problem with too many students going into low market value degrees and too few into high market value degrees. This is partially because there are many low market value degrees that are easier to earn. If you charge a fraction of future income, you are charging lower (or no) tuition for degrees that have low market value. And you are charging higher tuition for degree that have high market value.
People respond to incentives. This scheme incentivizes even more students to choose low value degrees and fewer to choose high value degrees; further exacerbating the problem. Instead we should focus on getting more students into fields that have low unemployment and high wages and to curb the number of graduates in fields with poor job prospects.
This is not to say that labor market outcomes are the only justification for a higher education. But let's face reality: most students cannot afford to pursue a degree purely for its intrinsic value. Such luxury is reserved for the aristocracy.
also will cut costs / high book costs / junk classes / etc.
I don't think the overpriced private schools should be a part of this, they'll just jack their rates even more.
17% of your salary for 2 years, if you get paid over $50,000.
0 if you get less than $50,000.
(pause if you get fired)
Math:
17% of 50,000 is $8,500. That means you only pay $17,000 for your degree.
(It also means you're only making $41,500, so you're better off negotiating a salary at $49,999.)
--Welcome to the Realm of the Hawke--
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... Payments are capped at $30,000
The article doesn't say what tuition costs are, but considering a "decent" private school is about $30-50K a year and state schools ar about 17K a year around here, it seems like a not terrible deal, if Lambda is accredited, and ends with a 4 year bachelors degree.
If it's a 2 year diploma mill arrangement, maybe not quite as good, but probably still a better deal with no interest accrued on a loan.
This is a very smart and valid point, because as we all know nothing about the economy has changed in the last three decades.
Anyone who makes a lot of money relies at some level on those with a university level education. Why should we be giving a tax advantage to someone who employs university-educated people instead of gaining one themselves? The entire point of a progressive tax system is that, regardless of background, if you are making lots of money you are able to pay a larger fraction back to support the society which got you to where you are.
If we start having tax rates which depend on what benefits you have derived from society it will open a very damaging Pandora's box. For example, why shouldn't people who have had the advantage of free medical treatment (e.g. in Europe, Canada etc.) pay higher rates of tax too? How about people who at one point received welfare payments but who have since recovered etc. One of the points of government is that it acts as a single pool that we all pay into and, when we need it, it provides the resources and benefits to help us become, or remain, productive members of society because then we all benefit. Shattering this model will lead to signficant negative consequences e.g. people avoiding healthcare, education etc.
Or, what if, hear me out now, what if colleges stopped the campus beautification arms race, and quit spending hundreds of millions of dollars on new buildings, and then passed the cost savings on to students?
You see? You see? Your stupid minds! Stupid! Stupid!
Room and board for an online school? Sure, a very Second Life dorm is provided.
This space intentionally left blank
Make Indentured Servitude Great Again.
In the meantime I'll just leave this here...
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
and use it to pay for school for everyone anyways, thereby eliminating a bunch of inefficient middlemen...
Don't tell me how much they've raised from investors, as some metric to the viability of a concept; investing is risky by nature. How many expensive failures do we need to see before we understand this concept?
Not that I'm apposed to the idea, necessarily, but I'm not sold that it's any better than our current system. It sounds like a tax on the rich to subsidize the poor ( and poor decision makers who pursue lower-value degrees because "DREAMS" and all ). In essence, it sounds like an abdication of personal responsibility.
Mod me down with all of your hatred and your journey towards the dark side will be complete!
Education (in America) is free for grades k-12, but then astronomically expensive after that, depending on your career choice?? Seems like it's beneficial for society to grant free education. This bit about paying a percentage of your income back, to pay for college seems like a shitty way to tax people that get an education, so why not just come up with a tax that we all pay for all of our free education? This would be a federal sales tax, in my mind.
Politics; n. : A religion whereby man is god.
I'm sure they would love this plan. Here is a thought for the top 20 tech companies, stop discriminating based on degrees, diversity, and racism in favor of asians and young people and go back to focusing on actual skills and on the job training. You can pay some money by simply not paying people more for having degrees or only counting degrees more realistically as being maybe 1/2 years of experience.
Also stop encouraging churn. Cycling people out every six months means you have more options with more skillsets but those skillsets came at the expense of learning on the job at the last place and those people will spend the next six months learning on the job at your workplace. The difference between that and just training your damn people (possibly even by having this cycle into tangent positions within your company so people have different jobs every six months) is that when you train your people they are still around with whatever knowledge would have otherwise been lost, they have job security and some basis for loyalty especially if you give raises to existing staff to match equivalent experience level for incoming hires.
There are still state universities in smaller states where you could live and work for a couple of years to get residency, then start college and (barely) scrape by. But you're right that it isn't nearly as easy as it used to be.
For example, my undergrad uni costs about $9,400 in tuition per year. That's less than a year of minimum wage even after taxes. Of course, you have to deal with books, food, and housing, so getting by on minimum wage would pretty much require finding several other people willing to split the rent on a small apartment off campus. But it should be (just barely) possible to work your way through school there without scholarships.
Check out my sci-fi/humor trilogy at PatriotsBooks.
The school would determine what you need to get trained in, as their ROI depends on students maximizing their 20% donations. High-paying jobs are the ones students will be trained for - creating an excess of workers in such positions, thereby lowering wages for high-skilled jobs, which is the eventual payoff that Peter Thiel seeks. Fuck that guy.
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
So if I run up 20 or 30K$ in debt for my liberal arts degree and the only job I have available is as a barista, I still have to pay?
On the other hand, with my software engineering degree in hand, I go to work for a startup. And agree to take minimum wage (not a "good salary") plus an equity stake a few years down the road.
Have gnu, will travel.
What does this say about the many people who fall for the 'free internship' scam? They don't even have a right to start working off their debts immediately.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Also.... does anyone remember when companies paid for training?
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
The current student loan framework is just like a company issuing bonds to finance expansion. The proposed scheme would be exactly like issuing stock. The university gets equity in you, and you pay them a dividend that represents their fraction of your earnings.
that's a bit off topic, but I'm fed up with seeing politicians gutting public institutions.
No less than Joe Biden is going around telling folks we should means test Social Security to keep it solvent (instead of just raising the limit on how much can be taxed due to inflation). He's being clever about it too, saying the "rich don't need SSI". Next it'll be the "Well to do" and then the "working class" and finally the program gets shut down and they pocket the money I paid in.
I don't know what's worse, the fact that they think they can sneak this past us or the fact that Joe Biden just did...
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
It's called a student loan.
All that ever happens is you get a student loan that - on average - never gets paid off, so the universities still charge fees anyway.
What you do is pay people's tuition, but only if they're actually progressing and keeping up and not failing their tests. Or what, in my day, was called a "grant".
My uni tuition was entirely paid for by grant. I had to pay only living expenses (but I lived at home with my parents). If I'd hadn't lived at home, I could claim more money for living expenses but I would have to prove that I didn't have any support or income. I also had the option for a student loan at any time (no payback until earning GBP25,000 or over, and then only a pittance) but I never exercised it. I was in the last year of students being offered a full grant.
Now I have a university degree. 20 years of industry experience. The wages (and thus taxes) to go with it. And no debt (except for a car I bought).
By comparison, all my friends who used their student loans STILL have them and are STILL paying them off... which cripples their life choices even though they got better jobs than they would have without them. All the younger kids have no option but to utilise a student loan and thus start adult life in huge debt.
And the government is some GBP 100 billion in debt now because they were hiding the cost of unpaid student loans on the finances and now they have to include them in the usual accounting manner (because of a lawsuit) and it just shows you that it would have been easier to just give free tuition and some support in the first place, made people have to work to be able to live, and thus stopped the debt thing altogether.
"The Department for Education estimates that 45% of the value of loans to undergraduates will not be repaid. Outstanding loans to students in England totalled more than £100bn this year, with £15bn borrowed last year alone. By 2022-23 annual loans are forecast to rise to £20bn."
It’s “Separate But Equal!”
What a bunch of fucking bullshit. All this would do is allow people to go t o school and maybe not have to pay back the costs. This is NOT a solution to student debt and our bullshit education system. Here’s a better idea.
Remake the compulsory education system. We keep hearing of how you “can’t get a job pumping gas anymore with only a high school diploma.”. Not really true and never was, but why not address the failings of the system, rather than trying to fix other things.
Why not do one or all of the following:
- Make schools year-round. More frequent and less lengthy vacations would mean less time squandered teaching the same things over and over again to kids who forget what they maybe did or didn’t learn the previous 9 months and also previous years.
- Extend high school two years for all students; let them be tested and given options and recommendations based on those choices. skilled-labor track or college track, and if they go college track, those last two years of high school can be used as the first two years of college. This would make the typical bachelor’s degree only two years long, cost half as much up front, make sure students are better prepared and more mature when they arrive, and level the playing field all in one fell swoop.
- You could simultaneously increase the driving age to 18 (for states where it’s 16 or below,) and give kids more time to grow up. At the same time, I would lower the drinking age to 16, or even adopt Germany’s approach which is to consider beer and wine as “Saft”... juice, basically allowing parents to regulate and monitor children’s experience with alcohol, rather than making alcohol something they must learn to cope with on their own with only their drunken peers for guidance. Letting kids get used to that while still having four years at home MIGHT reduce the problem of alcoholism, and co-morbidities.
If it sounds like this is just describing the existing paradigm with community colleges, in a way, you’d be right, except that it would be compulsory, meaning all kids graduating high school would be 20, would be better off and more mature before arriving in college, wouldn’t be seeing alcohol for the first time, alone and with no parental oversight or guidance, and also, they’d all have completed the equivalent of Associate’s degrees before showing up. The rates at which those who ENTER INTO bachelors degree programs stay and complete would undoubtedly skyrocket, stress AND debt would be reduced, and ALL of this could be done with EXISTING infrastructure.
Existing community colleges could be absorbed into existing school districts for the last two years of their new students’ compulsory education; and for parents (for at least the first two years after implementing this idea,) who don’t want their kids living at home, the kids would have the option of joining the military for a couple years, or a non-military civilian equivalent job service. This service could be in the National Parks System, or something like the Peace Corps, or any of one or more jobs programs such as we saw in decades past when the US government was actually functional and not a goddamned fucking corrupt and worse-than-useless fucking joke.
Now this WOULD probably mean a sharp uptick in students attending community colleges, but they could probably increase the size of their staffs to handle the increase in a few ways. Universities would likely have surplus professors who could be persuaded to go help, since that’s where all their students are going to be, and in the meantime, we could start PAYING teachers what they’re worth.
Just my three cents. (I threw in an extra. Inflation.)
Our reign has gone on long enough. Indeed. Summon the meteors.
Comment removed based on user account deletion
online learning
start-up
founded in 2017
with the backing of Y Combinator
has captivated venture capitalists
Surely, this will be a great success!
considering how many sheep get degrees in fields that are not in demand or even remotely needed, this should pan out well!
Did they just come up with the idea of public schools?
I mean I got a free education and now I pay part of my paycheck for it. This is not revolutionary.
Many states have certified online colleges for people who work at affordable costs, around 5-6K per year.
Clearly affordable and easy to pay off, and geared at careers needing people.
Western Governours College has degrees in IT/Tech, teaching, healthcare, business and even offer masters degrees.
https://www.wgu.edu/washington...
get a job as a broom sweeper and pay for your tuition!
I guess Poe's Law applies in both directions. Good show old sport, a mockery so fine I really thought you an idiot.
Maybe there's another possibility: OP is not posting from 2019. Is that you, John Titor?
Same for me... grants, working custodial at night and sleeping when I could= 0 debt when I graduated. I feel a little- very little-sorry for many of my classmates that had fun while going to school, but are paying out the nose now.
Everything above is my opinion....YMMV
As I do college planning with my high school junior I am appalled at the cost today. In 1989 my 13 hours of classes at UT Austin was $1378. A 130 hour degree plan was about $14000 all in. My off campus one bedroom apartment was about $310 a month. I used the UT shuttle and my food cost was about $100 week. All in cost for a four year degree was about $40,000. At many places today that won't get you one year.
No tuition at all and taxpayers pay for colleges. Since college grads usually earn more, they automatically finance there share of what brought them ahead in society. ... But that wouldn't work, wouldn't it? Because then we'd all be in some downtrodden communist third-world state like Germany. ... Oh, wait, that sounds weird ... errrm ... Nevermind.
We suffer more in our imagination than in reality. - Seneca
Think about it. Incorporate yourself, which will allow you to sell publicly trade-able shares of yourself to investors. Then use the money raised from the ISO to invest in education or a home or other prohibitively expensive purchases.
What's wrong with that?
you could start adopting our horrible, horrible "socialist program", used in northern Europe ;-)
You get tuition for free.
As in: It is in the interest of the whole society to have a well educated population, so everybody contributes through the taxes to pay so anybody can get free education.
Oh, by the way. We actually also pay our students a low basic income while they attend high school and after that for 5 years of university.
It has been like this the last 50 years or so.
In On the Wealth of Nations Adam Smith said that educated labor should cost be payable within 5 years. That way fields which make lots of money will be more expensive than those fields that don't. The price of tuition would be set by what the median graduate (of the past 5 years) is making.
Does nobody read history any more.
Sold my soul to the company store.
(Caveat: I have lived in places with company stores and know many people who have apprenticed, and have even helped set up apprenticeship programs)
-- Tigger warning: This post may contain tiggers! --
Because it doesn't help alleviate my six figure debt.
student loan bankruptcy needs to come back!
So the banks can force the schools to lower costs.
no student loan bankruptcy = unlimited loans
See subject.
How is this protected from bankruptcy?
https://en.wikipedia.org/wiki/MyRichUncle - in the early years they started out with a focus on this "% of income" type of repayment. They eventually switched to regular student loans though.
lol..it's not a right when someone else has to provide it. You are being selfish.
Is a way to pay for education through a highly inefficient tax system at higher rates than normal because most of those benefitting aren't paying, only those getting the education.
Why not just raise Federal tax by an extra 1% per bracket, with no deductions permitted?
Then the cost is spread across those who benefit by the amount they benefit. Furthermore, as you've one (pre-existing) collection point not many new ones, you don't have to pay for the overhead.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
This is how the HECS system in Australia works. It's not novel. It's simple and straightforward.
The government pays for your university tuition and then you pay additional tax each year that you're employed post degree. Interest is charged at CPI so there's no blowing out of the debt if you struggle to find work immediately / spend time in low income occupations. Most people pay it back within 10 years, so you're debt free by your early 30s.
The government funding this system = equal opportunity for entering university = more skilled workers = more tax for the government in the long run through the higher incomes that university educated people earn.
The % of your income that is garnished each year depends on your earning capacity:
Below $51,957 = Nil
$51,957 – $57,729 = 2.0%
$57,730 – $64,306 = 4.0%
$64,307 – $70,881 = 4.5%
$70,882 – $74,607 = 5.0%
$74,608 – $80,197 = 5.5%
$80,198 – $86,855 = 6.0%
$86,856 – $91,425 = 6.5%
$91,426 – $100,613 = 7.0%
$100,614 – $107,213 = 7.5%
$107,214 and above = 8.0%
because that's how you teach critical thinking to people who don't get math. The rich don't teach these things to their kids because they're rich, they teach them because they know it'll teach them to think critically and make them less likely to be taken advantage of.
The trouble with trying to teach critical thinking with math is there's no value in being 50% right.
and, well, do you really want vast numbers of people with maybe a useful skill but no ability to think critically or, say, recognize a demagogue?
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
which, for debts under $100k, is the case (thanks Bush Jr!).
For those who don't know the Southern United States has brought back debtor's prisons. The way it works is the judge orders you to pay and if you can't you're in contempt of court. Off to jail you go, and better hope your family can get the money. If not you can work for 50 cents/hr in the prison's work camps^X^X work programs.
Yes, this is really happening... What drives me nuts is nobody noticed when Credit Card debt became secure debt and debtor's prisons came back...
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Because it is bloody socialist, oh communist even.
Strange however that it works quite well in Scandinavia ...
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
There are places in the US that still give out free land. You don't have to pay rent, go make a living out there?
Sure, you're skipping the loan process, but the end result is the same. Is it really any different to be paying the university vs a lender? You're still just deferring tuition payment until after graduation..
The courses they're offering for these prices are the same online courses everyone else has and for far less money.
There is absolutely no possible way to do a data science degree of value the way they structured their curriculum in 30 weeks. 30 weeks of 8am to 5pm learning is absolutely worthless. For a program that should be focused on the success of their students as they won't make money unless their students graduate, this is a horrible design.
I would seriously recommend instead :
- Review high school math at Khan Academy for free... donate a few bucks to be nice
- Pick up calculus to understand rate of chance from Khan Academy.
- Pick up linear algebra from Khan Academy's pre-calculus course and then the linear algebra course.
- Learn a programming language (pick one, any one, it's just for learning principles), Code Academy, Khan Academy, or a thousand other sites will do.
- Learn programming theory, Khan Academy for a good intro algorithms course, or MIT Open Courseware for a hardcore one.
- Learn a data science language... Julia is hot now, Matlab/Octave is great too.
- Learn differential equations... this is only for people who want to be worth their salary. Khan Academy is good, MIT Open Courseware or Stanford is good too.
This can be done in 30 weeks if you're insanely disciplined. But it takes 18 months for the most experienced developers to become proficient in a programming language... anyone can learn a language in a few minutes, but to say "I actually know this language", someone who already knows 4 or 5 still needs 18 months.
I would also say that it doesn't make sense to do this program, it's all one thing. It doesn't seem to teach anything about anything for which the data set would be applicable, you'd leave with little more of value than stupid cat tricks.
Though, $50,000 i barely more than minimum wage... in fact it's probably considerably less. $15/hr minimum wage is $30,000 a year for 40 hour weeks. But overtime at time and a half would require yield $20,000 more with an average of 17 hours overtime a week. That may sound like a lot of overtime, but it's pretty common for an entry level programmer to work 60 hours a week while proving themselves without overtime pay. So, McDonald's pays more.
Consider also that they're asking for 17% of your wages for two years, so that's $41,500 a year probably taxed at a $50,000 a year bracket. So let's say it's the same as $20 a hour at 40 hour weeks, but you're probably working 60 and given the time and a half thing, it would work out to the same as about $11-$12 an hour if you were flipping burgers instead.
Now, if you received a real university education over a period of 3-4 years with the same deal... that would actually be promising.