Slashdot Mirror
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.
this space intentionally left blank
Unless it covers all obligations to the college, it's just a money grab. Otherwise it's fine.
Doesn't end up that way
curious... that's all...
[($)]
This article has a telling graph of how education has been moving out of reach for a large part of the US population
https://www.zerohedge.com/news...
While some technological things have become much cheaper the relative cost of education has increased manifold.
the student loan crisis is then just one aspect of this problem. It's the tip of the iceberg. I still see people focusing on the 'leeches' , people somehow abusing student loans. I'm sure that happens, but using such examples to represent the situation is entirely wrong. As is the solution which is presented in the article on here. The leeches are on the other side. They're the people getting rich off this.
Most $$ is made nefariously anyways :|
[($)]
What percentage of Starbucks salary could they take?
COE
This model will collapse when companies start offering a low salary for the agreed upon time period with a giant bonus to come after. It will also incentivize graduates to take low-income positions for the first few years (which may not be a bad thing for the graduates, but it will hurt the ISA programme). Unless subsidized, this programme will not be financially viable.
People will always take the best approach for themselves, and companies will be more than happy to capitalize on that. Paying out a large bonus after X years is much better for the company; 40k for 3 years + a 45k bonus is better than 60k for 3 years for the company and guarantees a 3 year employee retention. The graduate that can be paid less at decent retention is more appealing than the graduate that wants a full salary right away and might leave at any moment for better opportunities.
student athletes should have this min salary pro sports league minimum
every fresh graduate can perform well for the first few years
Clearly you've never worked in software development.
They want to make you a wage slave, no better than perpetual leasing on a car. Sounds good because the human mind thinks monthly
Everything the Government gets into gets more expensive. Housing in the 1930s from Fannie Mae Freddie Mac because "everyone should be a homeowner". Student tuition from WW2 on (GI Bill, and then student loans). Medicine from the late 1960s on (Medicare, Medicaid from LBJ's great society.)
What basically happens is all this government credit inflates what people can pay monthly upfront. And where there is an inflation of credit, there's an inflation of rising cost. Imagine you gave every American a govt sponsored credit card with a million $ credit line. First, over half the people would have absolutely no self-control and would go bust. On the flip side, with all this credit swamping the market, inflation would be through the roof. Well same fucking thing here.
That's why we have textbooks that ought to cost $30 going into the hundreds with a few sentences swapped as an "upgrade" every year. That's why tuition keeps going up, up, up when the average student's major needs no more major equipment than they did from the 1950s. That's why we need more competition in accreditation, less state barrier with credits, and accreditation should mandate transfer of credits. It's like we gave the big guys all the benefits of subsidies of the EU, but the people have none of the benefits (migration of labor vs migration of capital, etc). We're a fucking joke.
Now they're coming for your livelihood perpetually. You know why this sucks? Many college educated people get jobs with absolutely no connection to their degree. And don't think they'll won't take a slice of that too.
For most people with a middle of the road career not expecting to be a STEM superstar, go to Europe, find a apprenticeship that will actually pay you (very minimum) and get actual job skills rather than learn about Shakespeare and other tired tangent bullshit for years on end. College wasn't about work in the beginning, it was about enlightened learning, but that don't mean squat in the job market and is a poor fit despite being sold as the "dream". The only dream here is that's it's a good value for 90% of people. Give it the finger and don't let it enslave you.
Colleges have had giant lecture halls for skilled/expensive lecturers to lecture in. Less skilled (cheaper) TAs & grad students lecture the undergrad students in small groups, and engage in grading. This has been true for decades now.
However, colleges are throwing in luxury items, bloating up on administrators, and spending money on things like "Diversity Departments" (you only need 1 or 2 people for that).
Automation may create some jobs. The job's created are not as many as the jobs destroyed. They know this, cutting out the middleman(the bank), allows them to have a greater part of a shrinking pie.
Overpriced, over the top, politicized non educations for liens on kids' lives.
FOAD to any colleges and universities that can't deliver cost effective options with modern media.
Does payback apply if someone, er, "marries well"?
The job's created are not as many as the jobs destroyed
We either consume more (e.g. at a point, carriages and horses were for rich folk and regular people walked or road donkeys; cars are now a commodity) or we consume other things (e.g. we no longer spend 40% of our income on food, so we can buy iPhones).
allows them to have a greater part of a shrinking pie.
The size of the pie out there per individual person is getting bigger.
The hot-blast furnace allowed 200 workers to produce, in the same hours worked per worker, what 86,000 workers once produced in iron ingots. The wooden shipping pallet eliminated 85% of dock worker labor to ship the same goods. Pneumatic power tools. Computers. Intensive agriculture.
Because we don't have 98% of our workers laboring 16-hour days 100 hours per week on farms and at loading docks, we can make all this stuff. Those workers make tons of other things--many of them are doctors and nurses, researchers, engineers, computer programmers.
Support my political activism on Patreon.
Not as if they will ever earn anything with that degree.
Hot damn, somebody read The Unincorporated Man and thought 'Hmmmmmmâ¦..'
Vintage computer games and RPG books available. Email me if you're interested.
What exactly is the difference between an average student paying 20% of their income to an ISA, versus paying 20% of their income to a student debt?
Of course, it does mean that students that go into an above-average job pay more in total, while those below-average pay less, but even that is likely offset by the fact that you've got an experienced career-placement board doing everything they can to help you find a good job and negotiate as high a salary as possible, rather than just searching more or less aimlessly like so many graduates currently do. The increase in early-career salary is likely to continue boosting your salary for decades after the ISA has expired.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
It sure as hell sounds like it.
putting the 'B' in LGBTQ+
The point is, with an ISA you've been loaned *nothing*. All they get is a percentage of your income - if they can't help you find a good job, they get x% of jack squat.
Of course, you could still run afoul of a crappy university that offers degrees in advanced slacking just to claim your income - but even they have incentive to at least get you good job placement so they get x% of a bigger number. Compare to modern scam universities like you mention, that get paid exactly the same amount no matter how little value they offer.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Poor snowflake, can't handle competing in the job market without the full unmitigated advantage of white privilege?
Seriously - the only place where white men are at a disadvantage is in companies whose current employee base is overwhelmingly white men, *and* who are hiring minorities as fast as possible to try to rectify that racist and sexist imbalance.
If they're predominantly white men and don't care (which is many) you still have a big advantage. And if they already have an equitable mix of races and genders - the only disadvantage you face is the fact that the minorities and women had to work a lot harder to get to the same point in their careers. And if you can't be bothered to work as hard as them, why should you expect to do as well?
--- Most topics have many sides worth arguing, allow me to take one opposite you.
College was initially an place for rich kids trades where for others.
"Learn today, pay forever"
The Kruger Dunning explains most post on
"the struggles that white men face in the workplace,"
as a white middle aged man, let me tell you:
You're full of shit.
The Kruger Dunning explains most post on
This history of this sort of thing is pretty nasty and abusive.
While it might start well, eventually it will get to the point where interest will mean forever servitude and you will be liable to pay them back in full if you don't take the job they want you to take.
The Kruger Dunning explains most post on
The difference is power balance.
What happens when 'payback' percentage starts being based on your degree?
What happens when you don't take a job the university thinks you should?
You post is based on the false premise that they will be faithful actors.
Anytime someone has a direct hook into your pay, it becomes abusive. see: Entire history since the industrial age started.
What you are talking about would require a very expensive dept just to groom people into the 'correct' position, and the idea that the people running the college actual give a fuck about 5+ years down the road. They are not. They are worried about what they can get NOW, and it's i their best interst to control what you choose to do.
The Kruger Dunning explains most post on
Indentured servitude is unconstitutional.
This has been happening in the UK for a couple of decades, basically a loan that you only repay once you are earning.
This is NOT the same as an ISA. The key point of an ISA is that you pay a fixed percentage of your income for a fixed amount of time. This means that high earners pay far more than their education costs and low earners pay far less. The UK system is a loan where, once a high earner has paid it off, they no longer pay anything more. As the article points out this has the effect of cancelling out the investment risk from low earners because high earners will pay a lot more back than the cost of their education while low earners will never repay the full amount.
The UK loan system has a huge problem in that lower earners may actually end up paying far more back because the slow repayment rate allows interest charges to build up. A high earner may end up paying it off in a few years, minimizing any interest accrued, and so pay less overall.
I agree that there are a lot of attractive things about ISA's but they have a fundamental flaw that will prevent them from working: they are voluntary. Students ending high-earning degrees like medicine, law, science and engineering where they are reasonably certain that they will have significant earning potential will be far worse off financially signing up for an ISA vs a regular loan. Since loans will certainly be available to these students why would any of them sign up for an ISA which will cost them far more?
The result is that the high income students will sign up for loans and so the ISAs will only attract low income students making them financially unfeasible because they will have lost their upside.
The only way to make this work is to have ISAs compulsory for all students...but we already have a system exactly like that called income tax which is how University education always used to be funded. So how about we go back to that and then when high earners end up paying higher tax rates they will at least know that they benefitted from those taxes when they were a student and so perhaps they may object to them - and try to avoid them - a bit less than they do now?
"Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Section 2. Congress shall have power to enforce this article by appropriate legislation."
Wanting an education in a high tech economy is not a crime.
Again *there is no loan* which means that *there is no interest*
You're thinking of existing student loans, where you incur a definite dollar-value debt, which must then be paid off, with interest - perhaps limited to x% of your income per year until such time as it's paid off, but if it takes you 80 years to pay it off, well then it sucks to be you.
That's not how ISA works. There is no loan. There is no principal to pay off. There's just you, getting a completely "free" education in exchange for paying X% of your future income for Y years after graduating. Can't find a decent job? Can only pay $10 per year toward your ISA obligation? It doesn't matter - you're still only on the hook for the same Y years you agreed to, and then you're free even if they only got a total of $100 from you.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Isn't this called "workplace education"? The company trains you, and then it takes away a part of what you've created.
Ezekiel 23:20
You're talking about student loan debt. There's no debt with ISA - just an agreement to pay x% of your income for y years, and then you're free. If that's 20% for 10 years, and you're making $10k/year for all that time, then they get $2k * 10 years = $20k. If you're making $100k, then they $200k over the same 10 years.
The more you profit, the more they profit. And either way, in year 11 you're free of any further obligation.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
The difference is that the 20% will not stay at 20%. It can be pushed to 100%. Student loans are capped by the risk falling on the person giving the loan, or the lack of ability to pay - this proto-bondage can always get tighter.
GENERATION 26: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
They tried it a decade ago, and probably a decade before that. This has nothing to do with gullible millennials : it's almost certainly one of those perennial ideas that is a consequence of a broken education system.
GENERATION 26: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
>What happens when 'payback' percentage starts being based on your degree?
Then you take that into consideration when choosing your degree. If an arts degree requires 40% while an engineering degree requires 10% (because of the much higher expected return), then maybe you should think really hard before wasting everyone's time on an arts degree.
>What happens when you don't take a job the university thinks you should?
What's specified in the contract you signed? Probably not much since they can't force you to perform, and thus you'd quickly get out of the job the hard way, while making them look bad in the process.
As with any contract, you want to be careful what you sign. You wouldn't sign a student loan contract without examining the details, I hope?
>They are worried about what they can get NOW,
You're describing current universities, that get paid NOW, in exchange for (implied) benefits to you after graduation.
If they don't start getting paid until after you graduate, and the total amount they get paid depends entirely on your income for the first 10 years (or whatever the ISA term is) after graduation, they have a strong incentive to make sure:
1) you're not studying something for which you don't show an aptitude
2) you're not being funneled into a career path you're going to be quickly disappointed in
3) you're not pissing away your time on "the college experience" instead of learning useful skills
That does mean that they have incentive to simply reject marginal students, but the students they accept, they're going to groom to make the largest possible amount of money for the first 10 years after graduation. It's still not 100% aligned with your own priorities, but its likely to be far more compatible than the current arrangement where they want you to rack up as much student debt as possible, as quickly as possible, and then good luck paying it off after graduation, because you're not their problem anymore.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Well, I sure as hell wouldn't sign that contract, would you?
If you sign a contract saying 20% for 10 years after graduation, then the only way they can change that is if the contract also says "or whatever we decide to unilaterally change that to"
--- Most topics have many sides worth arguing, allow me to take one opposite you.
not in order just off the top of my head:
1) Inflation. don't forget and remember that they no longer have to report exactly what it is.
2) Lower income for everybody but the top. Wages have gone down for half a century now; people didn't notice as women's freedom was hyped at the same time the quality of life with 1 adult working was becoming unsustainable.
3) Cheap commodity items like food, junk food, clothing, technology made TV cheaper etc. This gives the illusion of increased prosperity relative to more wealthy past generations who could only afford 1 TV etc. REAL costs that can't be artificially changed will appear to rise. Just look at the % of income spent on food now vs past.
4) Union protections of wages at most universities have kept salaries rising with inflation (I think it is less than inflation) but I would guess rising higher than everybody else who has been losing income which makes the cost of school rise relative to people's incomes. BENEFITS like healthcare remain while the anarchy we call a healthcare system continues to infect costs of everything made locally.
5) Administration costs seem to rise as it gets more top heavy despite increased clerical automation.
6) SPORTS and other money pits which are essentially marketing that claim to pay for themselves (even so, it's entertainment and teaching teamwork is pure BS.) Sadly, my state college funding in general rises when the state football team does well. So the problems are wider and deeper.
7) Government subsidies have dropped resulting in higher prices in the public sector. My state 40 years ago payed 80%. now it's in the 30s.
8) LOANS. the financial sector and it's corrupting influence of government have setup a huge mess on top of everything else.
9) Growth. More people have to get degrees and trade skill training as automation and outsourcing expands; this has been going on for decades already. Expansion costs and adds overhead; look at your local colleges etc. How many new building projects have you seen? I bet you've noticed. Those buildings last a century but must be built in advance.
10) Only a guess: Private schools have to compete more due to online courses, increased advertising... about 1/3 is MARKETING to get you to sign up, scholarships (aka coupon "discounts") , referral deals (kids,) and to make you feel great about your purchase. Private schools waste a ton of money they have no accountability for this; higher prices make it more elite and can be spent appearing more elite.
Aside: Corporations do not train anybody; rates are extremely low. They want everybody else to pay for training and this is in a time with INCREASED specialization. In the tech field the specialization is at insanity levels that it's not only a joke but not uncommon to have impossible job requirements. They want schools to teach their specific niche fads years before the buzzwords have been coined. As good MBAs, they shift all responsibility elsewhere.
Democracy Now! - uncensored, anti-establishment news
Yeah I would have signed it in a heartbeat, as a 1st year student. I would have sold my body to a brothel if it were an option, too. I was sick of starving and watching my grades plummet from lack of food pretty quick and the options I was willing to consider were pretty large. I very nearly failed out, and was saved a couple of times by dumb luck.
GENERATION 26: The first time you see this, copy it into your sig on any forum and add 1 to the generation.