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More Colleges Try Forgoing Tuition For A Percentage of Future Income (yahoo.com)
"Some innovative colleges, in partnership with private investors and a small number of philanthropies, are experimenting with a new financing model called 'income share agreements' or 'ISAs,'" reports Yahoo Finance:
With an ISA, instead of assuming a fixed debt obligation, students simply agree to pay an affordable percentage of their future income over a set time period, subject to an overall cap. High earners will have larger payments than low earners, but all will have an affordable payment, based on what they will actually be making. Importantly, when the college is providing some or all of the funding for the ISA, its return will be aligned with its students' post-college earnings, giving it economic incentives to make sure its students both graduate and find jobs. The college is, literally, invested in its students' success...
With ISAs, there is no principal or interest. Thus, they are much better suited for low income students as their financial obligations never exceed their ability to pay... In a recent paper commissioned by the Manhattan Institute, we looked at the small but growing number of colleges and universities offering ISA programs. Indiana's Purdue University launched the first such program in 2016. About a dozen other institutions have now followed suit, including Lackawanna College in Pennsylvania, Clarkson University in New York, and the University of Utah. Most of these pioneers offer ISAs to students as an alternative to non-subsidized federal loans, though a few are offering them as a complete substitute for borrowing... A common feature of all these ISA programs is that they require payments only when the graduate meets a certain income threshold. All impose time limits and caps on the total amount that needs to be repaid, though they differ widely in where they set those caps and limits.
With ISAs, there is no principal or interest. Thus, they are much better suited for low income students as their financial obligations never exceed their ability to pay... In a recent paper commissioned by the Manhattan Institute, we looked at the small but growing number of colleges and universities offering ISA programs. Indiana's Purdue University launched the first such program in 2016. About a dozen other institutions have now followed suit, including Lackawanna College in Pennsylvania, Clarkson University in New York, and the University of Utah. Most of these pioneers offer ISAs to students as an alternative to non-subsidized federal loans, though a few are offering them as a complete substitute for borrowing... A common feature of all these ISA programs is that they require payments only when the graduate meets a certain income threshold. All impose time limits and caps on the total amount that needs to be repaid, though they differ widely in where they set those caps and limits.
If someone's success depends on your success, chances are they're going to help you actually succeed.
Let's see how this works out.
Your (financial) success (as a business) depending on the success of your graduates is a principle that should be applied to all for-profit schools because currently their business model seems to be to trick students into life long debt slavery in return for a truly useless bargain basement education.
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But that is a good thing, isn't it? Either those types of jobs are needed so it behooves employers to pay accordingly or they are not and it makes little sense to waste a human mind to it.
There are some big questions to this.
I got my masters degree from an another school then my undergrad degree. Who is to say how much of my salary is from my undergrad education and how much from my masters.
A student after a year or two determines that they don’t like that school and switch. Or fail out and one they matured they went to an other school.
Or the cases of the Billionaire college dropouts like Bill Gates, who realized they could make more money with their own business then wasting more time at school.
This method is hiding the fact the College Education is too expensive and a way to make college administrators lives easier by not finding area to save money. Such as not keeping on building new building but utilizing the space they have.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
"trick students into life long debt slavery" - not living beyond your means and simple math... if you can't do both your not smart enough for the watered down courses that pass as 'university' now days
Sounds like someone is either a shill from for-profit, naive, or an AH. What GP said is talking about many for-profit universities (e.g. DeVry, UoF, etc.) that don't care about their students' future but rather the number of enrollment. The more they can enroll, the more money they will get from the government. They don't care whether these students will graduate and become successful in life. The drop out from this type of universities is way higher than any public universities (including well-known private universities).
The trick part is from getting people enrolled. Their recruiters sell dreams to those who aren't capable of looking far ahead in their lives -- average people. There are a lot more average people than you think. I know you are above average, so please stop using yourself as a standard (the motto "if I can do it, you can too").
This has NOTHING to do with living beyond their mean.
Looking at averages also underestimates the seriousness of the problem because it disregards the distribution of income.
When average income rises but mainly goes to a small minority, then the majority can actually have a lower income and they are even worse off.
Money does not equal success. This will simply lead to pressuring students into more lucrative majors while completely neglecting the rest of the university. Might as well just open a trade school.
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The Arts. English, writing, these are all needed for a healthy society.
Motivating college to focus only on high paying career fields means things that make life beautiful will be forgotten.
The Kruger Dunning explains most post on