
No Tuition, but You Pay a Percentage of Your Income if You Find a Job - dhh2106
https://www.nytimes.com/2019/01/08/business/dealbook/education-student-loans-lambda-schools.html
======
atiredturte
Australia has a system that, while different, has similar perks to this. We
have a government loan system called HELP (formerly HECS).

Basically students can get a zero interest government loan (rises with
inflation), and only need to pay it off once they make above a certain
threshold ($51,957 according to the official website[1]). The payments are
deducted as a percentage of your income, with the payments increasing with
your wage.

This has a number of benefits:

1\. Students whose degrees don't work out for them (i.e. can't find meaningful
employment) aren't stuck with rising interest on their debts.

2\. Allows poorer students to go to uni without parental support (I am
currently a student and support myself entirely)

3\. Reduces pressure on graduates to find a job just to pay off their debts.
They can take their time to find a good job in their industry, rather than
working lower-paying, unrelated work to pay off their loans.

My degree at UNSW in Australia will cost about $27k AUD (~$19k USD) and I'm
unsure about the costs of others in my country. Under the HELP system,
Australians are allowed a fair go at an education, and can take their future
into their own hands (rather than relying on their parents).

[1] [https://www.studyassist.gov.au/paying-back-your-loan/loan-
re...](https://www.studyassist.gov.au/paying-back-your-loan/loan-repayment)

~~~
nthot
Is it stepped at all? Do you owe nothing before 50k and then once you cross
that threshold you now owe money? That would seem to incentivise staying below
that threshold for a percentage of borrowers.

I also have difficulty seeing the first benefit you list as being a benefit. I
don't have a problem with people pursuing degrees in fields that aren't big
money makers, but I also don't know that the government should be in the
business of incentivising people to study in these fields.

On the other hand, there is societal benefit to these fields being pursued in
general. And the market economy may not adequately pay for the benefits it
receives. As a society we wouldn't want everyone to major in poetry, though.

~~~
drieddust
> I also don't know that the government should be in the business of
> incentivising people to study in these fields

That's interesting. So do you want government to only fund the vocational
courses and allow the rich class to be the torch bearer in research, art, and
culture because only they can afford it?

~~~
kartickv
I'd think taxpayer money should be spent in ways that create measurable
benefit to both the individual and the economy as a whole.

I'm not seeing the downside of only the rich being able to understand how
Post-Impressionists like Suerat were different from Impressionists like
Renoir.

~~~
drieddust
> I'm not seeing the downside of only the rich being able to understand how
> Post-Impressionists like Suerat were different from Impressionists like
> Renoir.

You are picking the edge case here. Art and culture are much more then just
rich class's pretense.

As far as wasting money is concerned, spending it just to create more
replaceable cogs for capitalistic profit seeker is also a wasteful exercise.
Why not ask the Industry to invest in producing those cogs and let government
think the long term by focusing on things which cannot be measured in next
quarter.

Why Government should subsidize the Industry?

~~~
kartickv
> things which cannot be measured in next quarter.

I'm all for long-term investments, but can these ever be measured? If not, it
will take more than your claims to convince me that it's worth investing in.

There are other ways to appreciate art and culture, such as visiting museums,
reading books, watching documentaries or other youtube videos on these topics,
etc. These are all free or much cheaper than a course in a college. You
haven't demonstrated how an academic setting is better and worth the cost.

Govt doesn't need to subsidise industry. I'd be fine if these loans are issued
by private investors, as with Lambda school.

> capitalistic profit seeker is also a wasteful exercise

No, their benefit can be measured in GDP. Imperfect, sure, but 100x better
than your hand-waving claims. No personal offence intended.

~~~
azemda
>There are other ways to appreciate art and culture, such as visiting museums,
reading books, watching documentaries or other youtube videos on these topics,
etc. These are all free or much cheaper than a course in a college. You
haven't demonstrated how an academic setting is better and worth the cost.

Academics is necessary to teach people how to create, understand and
appreciate Art and Culture. People writing books (not necessarily, but most
probably) have a degree in Language and Literature, people creating
documentaries have a degree in Film-making etc. If you think these skills can
be obtained from reading books, watching videos on YouTube etc, then the same
thing can be said about STEM fields as well.

~~~
kartickv
> Academics is necessary to teach people how to [...] understand and
> appreciate Art and Culture.

Any evidence in favor of that claim?

> If you think these skills can be obtained from reading books

I didn't say that nobody should study these fields; just that they needn't do
so on taxpayer money.

~~~
azemda
Here is the OECD report
[http://www.oecd.org/education/ceri/arts.htm](http://www.oecd.org/education/ceri/arts.htm)
which stresses the importance of Arts in education and benefits of arts to
students (even students of non-arts subjects). They also conclude that "The
arts have been in existence since the earliest humans, are parts of all
cultures, and are a major domain of human experience, just like science,
technology, mathematics, and humanities. In that respect, they are important
in their own rights for education."

Some Universities have Arts appreciation course for non-arts students who are
interested in knowing, understanding and appreciating Art.

>just that they needn't do so on taxpayer money

May I know the rationale behind this? If I understand correctly, what you're
trying to say is that letting people study these subjects on taxpayers money
is a waste of public money, which I think is not true. There are people with
Academic arts background who have contributed to the society. Even (for the
sake of argument) if these are not economically rewarding areas of study, is
it justified that the whole field of arts which has been there almost since
the beginning of mankind to be not funded by the government just because the
system under which we currently live doesn't find it profitable? Is it
justified to deny access to an entire group of people who are interested to
study Arts but they can't because they don't have the money to pursue it?.

~~~
kartickv
Thanks for a reasonable disagreement, unlike the other respondent to my post.

I was saying that govt should perhaps not give subsidised loans to individuals
(as in the Australian example) to study things like art because:

\- the subsidised loan program needs to have a positive measurable ROI for it
to continue. Otherwise, the next govt may bring it to an end, because there
are hundreds of projects competing for government resources.

\- in a world where poverty still exists, programs that are more bang for the
buck may have the maximum positive impact on people. I live in India where
millions are poor. Some amount of money should definitely be spent on arts /
culture, but probably 100x more should be spent on pulling people out of
poverty, and the way to do that is to identify high ROI investments in people.

\- there are already other venues than Australian-type student loans for govts
to subsidise arts / culture-type education, like university grants.

\- I'm not sure about the ethics of giving a loan to a student for a course
that may not pay back financially, but the loan will with the student for
life, even if payment is delayed till his income increases. If arts are
considered important to society, is it ethical to burden a student with the
loan?

It was just a thought. I'm not adamant about it. I'm happy to see that we've
had a good exchange of views, which is supposed to be the purpose of a forum
like this.

Thanks for sending the link to the OECD report. I'll read it when I'm free to
learn more about this topic.

------
mdasen
How is this different from income-based repayment of federal student loans?
While there are different programs, the general idea is that you pay 10% of
your "discretionary" income for 20 years with the guarantee that your payments
aren't higher than the 10-year payoff rate.

The article doesn't really have information on the Purdue system other than
saying that it might cost high-earning students 250% of the price of their
education. Of course, a 30-year loan at 6% will have the borrower repaying
216% of the original amount and around $24k/year so it would only cross 10%
for people earning a quarter million a year (and it doesn't generally seem bad
for people earning a quarter million to pay more back).

The big issue is for universities is how they would handle marriage. For
federal IBR, I believe you have to file your taxes separately. That isn't a
big issue in 2018 due to the Tax Cuts and Jobs Act of 2017 which meant that
the tax brackets for "married filing separately" are the same as "single" up
to $300,000 in individual income. However, in 2017 "married filing separately"
had higher taxes starting at $76k.

The federal government has a big hole in their IBR calculations in that it
doesn't consider the fact that spousal income can change what another spouse
might earn. But it's the federal government and they can afford to lose a
bunch of money.

How would a private university with a much more limited budget handle this?
Would they be happy with someone deciding to leave the job market because they
married a high-earning spouse? Would they require payments based on household
income?

Likewise, the article really doesn't answer how a university is going to do
this. With the Lambda school, it's easy: VC. Lambda has quite low costs (their
programs aren't 4 years), they only teach high-earning fields, and they have a
2-year payoff window. It's easy for them to say that their students average
$70k/year and 17% of that for two years is $23,800. Likewise, the two-year
payoff period means that things like marriage and leaving the job market
aren't as likely.

While universities have a bunch of money, can they essentially float tuition
for a decade or two? Probably not. If they could, they could have just offered
loans themselves rather than having the federal government lend to students.

Plus, while the cost of university is terrible, most students don't graduate
with a mountain of debt - more like a hill of debt. $22,000 is a lot of money,
but a middle-income job can tackle $22,000 in debt. That's well below the cost
of the average car sold in the US. More importantly, 10% of your income would
likely be quite a bit more than the regular payments on a $22,000 loan. Are
universities just going to use income sharing agreements to replace grants?
Will students be graduating with $22,000 in loans plus an income sharing
agreement to cover what the university scholarships/grants?

Generally speaking, universities in the US price themselves as, "how much can
you afford to pay?" If you are receiving need-based aid and get a merit
scholarship, usually your price goes up because that merit scholarship means
you can afford to pay more. Is the income sharing agreement going to mean that
students can afford to pay more? "I know that you can't afford more than $X
today, but this agreement ensures that you pay $X and then Y% of your income
after graduation." Is that the future?

One of the things that makes education financing so difficult is that steps
taken to reduce student hardship can simply increase prices. If you give every
university student a $10,000/year grant, every university knows that they can
raise their prices by $10,000/year. The students (and families) were paying
the price before given their means. If the government gives them an extra
$10,000, the university knows they can ask for it with little to no options
for the student. Universities can capture most or all of programs designed to
help students afford them (rather than helping the students).

~~~
mcherm
> The big issue is for universities is how they would handle marriage.

I don't see why this is an issue at all. If the college claims that "finding
the high-income person you will marry" is one of the reasons to attend that
college, then they should please return to the 1950s (or earlier!). If they
DON'T, then the repayment should be based on the individual's income,
regardless of their spouse's income.

Does this mean that a college risks getting paid very little by a graduate who
ends up becoming a stay-at-home spouse? Sure, but that's part of the risk. A
4-year college wishing to introduce such a program can always take a less-
than-complete approach and still charge some minimal tuition up front
(presumably in exchange for a smaller slice of "lifetime" earnings).

~~~
ggggtez
I've heard professors argue that college as a physical location is only useful
for meeting people, and the learning itself was not even relevant. I don't
think this is a 1950s outlook.

~~~
AnimalMuppet
If I understand correctly, at least at elite universities, that's about
meeting _contacts_ , not so much about meeting _spouses_.

------
deepnotderp
You know, it's funny, there's a lot of comments saying something along the
lines of "college isn't just to get a job".

Which is really funny, since that's absolutely the _primary_ reason why
college educations are pushed. E.g. "if you don't go to college you'll end up
working at McDonald's"

Plus, I have yet to see the evidence that colleges provide this virtuous yet
intangible quality of non-economically beneficial "wholesome" education.

~~~
dahfizz
I have never found the argument that "college isn't about getting a job"
convincing. Yes, it's important to be well rounded and expand your horizons
and all the other platitudes that people say. But I'm not paying tuition to be
"well rounded", I'm going to college as an investment in my own human capital.
I can read an interesting book in the evening to be "well rounded".

~~~
claudiawerner
Perhaps some people are paying tuition to such intangible benefits, just you
(and I) aren't. Many people in such situations likely repudiate the whole
concept of "human capital" (and maybe with good reason).

~~~
dahfizz
That does seem like buying a car factory because you like the new car smell,
in a way. Maybe it's the bias of my own experiences, but I can't imagine what
rational person faced with the realities of the world would spend tens of
thousands of dollars (and $1 million+ over thier lifetime potentially) and
years of thier lives in pursuit of what is essientially a curiosity or hobby
(unless they are already very well off).

If one does have such an intense interest in some topic, getting a "real
degree" at college would offer them a lifetime of spare money and time to
pursue it. You can't do much painting working 80 hours at McDonald's only to
not be able to afford paint. It just doesn't make sense to me.

------
austenallred
Hey, co-founder of Lambda School here.

Yes, some countries have similar structures, where you pay after a certain
threshold. The difference is:

1\. In those structures the school gets paid no matter what, the taxpayer just
swallows the cost. With Lambda School we will literally go out of business if
a large percentage of our students don't get jobs. That causes a lot of stuff.
For example, we have an entire sales team dedicated to bringing companies in
to hire students, and there are 2-3 that come in every day to hire students.

2\. Our minimum is much higher than government minimums ($50k in the US).

3\. We only collect a percentage of income if you're hired in field (using the
skills you learned)

4\. If you don't get a job within 5 years the agreement simply goes away and
you owe nothing.Happy to answer any questions, though I'll be in and out.

~~~
IMTDb
It might be cynical but it seems you are moving from a bad system to another
bad one.

In the current system, students are the customers, in your new systems,
students are the products.

How will you ensure that your private interest are aligned with individuals,
and society needs ? You are currently avoiding that issue by targeting high
demand/high paying jobs but on a larger scale those issue will arise

~~~
austenallred
How are students the products now? We only get paid when they are successful,
that doesn’t mean they’re not the customer.

The service we provide is helping them into a good job, so of course hiring
companies are stakeholders, but companies are the customers.

~~~
IMTDb
The university has an incentive to value your early salary _above all else_.
This may be dangerous (hence my question). The article clearly shows some
potential issues by pointing to several very useful but not very well paid
profession (eg: nurses) who will have trouble finding lessons in this model.

Closer to our trade you might see stuff like :

\- We don't offer design lessons because backend developers earn more than
designers, so go study Rust, it's so hot right now !

\- Marketing ? Heck no, salaries are only soaring later in your career, we
can't get break even with that

\- Your idea of a quantum computing course seems interesting but we don't
believe there is a big enough market for people in that field at the moment,
it's more of a research subject right now (weather that's true or false is up
to the reader to decide).

\- ...

Since the university is exclusively paid by your future salary, every second
that you spend in class must be immediately translated in extra $$$ in you
first compensation package. If your goal is to make as much money as soon as
you get out of school, your incentive are aligned. Otherwise they are not, and
that can be dangerous. Steve Jobs is a notorious example of someone who took
some lessons that did not seem really useful not so high profile at the time,
and only later proved to be critical in his success.

At a much smaller scale, 7 years after graduating, I am rediscovering some
skill/knowledge I acquired at uni that did not seem to matter a lot when I
started working (and that definitely were not taken into account in my first
job interviews). I believe they makes me a better/more productive engineer. I
fear that under that new system I might have never learned them in favour of
something hotter and more marketable.

~~~
diminoten
It's not dangerous, not nearly to the extent you're making it out to be.

------
noetic_techy
Good. This does exactly what Nasim Taleb argues and forces the college to have
"skin in the game." Education needs this sort of revamp badly. Government
meddling with student loan guarantees caused the price inflation, more
government meddling won't solve the problem. The system needs a reboot, and
this sounds like exactly what it needs. Don't pay unless you make over 50k,
awesome. Payback lasts 2-3 years, awesome! I'm sure there are nitty gritty
details, but this sounds like the model we need.

As far as less profitable majors or high risk individuals, they can remain in
the traditional system and pay up front. You don't have to totally scrap
everything else. If you truly want to study Russian literature that's fine,
stay in a traditional system, but don't force the rest of us to accept it just
because you want to be a special butterfly edge case. We should not be
catering to those types. Eliminate guaranteed federal loans and the price of
those majors would come way down anyways. If you truly want to preserve some
niche program, some strategic investments on the schools part could set up
something that returns enough money to allow a handfull of true scholars who
do well but are too poor to pay up front still attend and get their niche
major.

You may even see the emergence of a school that has radical teaching methods
that turn high risk students into earners. Probably a system you can't even
fathom yet which involves some level of psychology and counseling along with
your education to get you to the finish line.

~~~
voidhorse
This "special butterfly edge case" == anyone who wants to specialize in the
humanities attitude will probably lead to a bleak future. Life does not begin
and end with technics nor economics.

Supporting the continued interest in the historical, artistic, cultural,
literary and philosophical development of mankind and likewise supporting the
preservation of these fields shouldn't be seen as 'catering to those types'.
If you'd like to live in a world devoid of art, culture, and history, but
efficient, logical, and completely determined to the apex, be my guest; it
sounds like tons of fun.

If these systems are to be adopted nationwide they'll have to figure out a
reasonable way to fund studying the humanities for more than just 'a
handfull[sic] of true scholars'. Traditions and whole fields of disciplines
don't live and die off the progress of a few geniuses--they are worldwide
human endeavors sustained by a complex of economic, political, and pedagogical
interests. Maybe that means this sort of model is only fit for 'trades', but
eliminating support for the humanities wholesale wouldn't work.

~~~
leereeves
An Income Sharing Agreement (with a max tuition much higher than $30K) would
be great for high-risk fields like the arts and humanities.

A percentage of earnings from a single George Lucas or JK Rowling would
finance the school while the vast majority of students would pay nothing.

------
pjc50
So this is converting education funding from "debt" to "equity", by demanding
a chunk of the salary of its graduates.

It's not completely unheard of; airline pilots often have a similar this
arrangement because their training is so expensive. However this is the dark
side of a "human capital" approach - the educational capital exists in one
person's head, but the _return on capital_ is partly owned by someone else.

It does however share risk back to the educational institution, which has
become a problem of people being left stranded by imcomplete courses or
worthless degree-mills.

> Critics of such programs have argued they are a form of indentured
> servitude. The percentage of income that Lambda takes — 17 percent — is
> high, and has even been described as predatory. And Purdue’s program is even
> more aggressive: It is a loan-like arrangement that could charge high-
> earning students 250 percent of the cost of their education.

Hmm.

------
twblalock
> At Lambda, students pay nothing upfront. 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.

This appears to create a cliff:

If you make $50000 a year, you keep $50000 a year.

If you make $51000 a year, you pay 17% ($8670) and you keep $42330. That extra
dollar cost you a ton of money.

It really ought to be a marginal rate like tax brackets.

~~~
ibeckermayer
There is a cliff, as a person with an ISA with a similar program (Holberton
School), there's really no disincentive to seek a high paying job. The ISA
doesn't expire, if I'm making below the threshold then it just gets deferred
until I make above the threshold.

~~~
CapnCrunchie
At Lambda School, the ISA does expire after 5 years of not meeting the income
threshold.

------
rland
We're asking the wrong questions. A full semester at my local community
college is under $1000. Extrapolating to four years of undergrad education,
that's $8,000 total.

WHY do we need this never ending whirlpool of sophisticated financial schemes
to take care of this problem?

~~~
elteto
This might be the case for small community colleges but public universities
are closer to $400 and $500 per credit hour. See [0] for an example.

[0]
[https://www.collegetuitioncompare.com/compare/tables/?state=...](https://www.collegetuitioncompare.com/compare/tables/?state=TX&degree=Undergraduate&type=Public)

~~~
wahern
That data shows that most 4-year public colleges in Texas are less than
$300/hour, with some less than $100/hour. The average is $238/hour. (From
[https://www.collegetuitioncompare.com/compare/tables/?state=...](https://www.collegetuitioncompare.com/compare/tables/?state=TX&degree=Undergraduate&type=Public&level=4-year%20or%20High))

Most people tend to discount the cheap, unknown schools. But they're
accredited, which means they provide a vetted curriculum and their degree
satisfies prerequisites for higher degrees at other accredited institutions.

------
wbronitsky
While interesting, this is not a new approach.

I graduated from App Academy in San Francisco over 5 years ago, paid a
percentage of my income for 6 months in my first engineering job, and after
roles at Stripe and Bain Consulting, have never looked back.

~~~
RunawayGalaxy
Out of curiosity, does Bain hire a lot of web developers?

~~~
wbronitsky
Great question! I asked myself the same thing initially. Bain now has a design
and development lab to help solve problems using software. We add human driven
design and development to the traditional Bain toolkit. Its an interesting
role to say the least!

------
1999
Congrats to Lambda School on finding a way to get companies to pay for
employee training.

~~~
austenallred
:) basically

------
Shivetya
Another sounds too good to be true because of just that. there are only the
feel good details in the article and not the nitty gritty that is needed to
even make it plausible.

so, with regards to not paying it back if they don't land a job. how long are
they held to that commitment? do we also look to see if they have another
means of support? five years, ten, twenty?

with regards to not paying up front, perhaps if we cross that one taboo. not
every degree is worth its cost and many not worth having money risked to
obtain them.

but the big reason education is expensive is because government is free with
loaning the money but not putting restrictions on what colleges can charge per
course hour nor what those hours encompass. treat it like medicare/medicaid
where the government sets the rates per course credit and you can guarantee
colleges will fall over themselves to get that government money and loans

~~~
austenallred
> so, with regards to not paying it back if they don't land a job. how long
> are they held to that commitment?

The agreement lasts up ton5 years. If you haven’t paid back at the end of 5
years it goes away and you owe nothing.

You can also pay upfront, but most students don’t have enough cash to do so.

~~~
jki275
it's also possibly cheaper to pay up front -- 20k vs up to 30k if you pay on
the installment plan afterwards.

~~~
austenallred
Yes it likely is cheaper to pay upfront

------
lordnacho
This is replacing student debt with student equity.

Here's some thought on debt and equity:
[https://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theo...](https://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theorem)

AKA the "capital structure irrelevance principle."

My thoughts for some reason wandered that way, but I was actually going to
address another issue: as long as it's expensive to go to college, you can't
win. There's no free lunch. If college were cheap, you could spend a few years
improving your future earnings. If it's fairly priced, you can't. It's as if
everyone will be trapped by efficiency, though I haven't quite fleshed this
out in my mind.

Of course college is not the only thing there is, but it's a fairly big
aspiration for a fairly large chunk of the population.

~~~
quickben
Where do you see "equity"? This is replacing a student loan, with a no barrier
of entry, no approval needed, student loan.

If the housing market is any example of what happens when entry is eased (low
% rates, etc), we are looking at student loans being a lot higher than they
are now.

~~~
acchow
The "school" is "buying equity" in the student (which may or may not end up
being worth something).

------
utdiscant
Congratulations on the round Austen and team!

One thing I have always thought about when it comes to incentives in this
model is that you have an incentive to only take in students that are likely
to finish the degree and get a high paying job. This could lead to pattern
matching people from backgrounds that are likely to do well due to
demographics. How do you think about this and do you have any systems in place
for minorities?

(copied this comment from
[https://news.ycombinator.com/item?id=18856135](https://news.ycombinator.com/item?id=18856135))

------
nonsince
I’d like to congratulate the brain trust at silicon valley for inventing
public education and taxes

~~~
mac01021
Except it's not.

"Public education and taxes" (1) means everyone pays into the system and then
people can enroll without any additional payment (or maybe with diminished
additional payment).

You could also have publicly insured student loans (2), where the student pays
tuition with a loan and then if they later default on the loan then the public
eats the cost.

But this system (3) is neither. In this system, you get your degree and then
you start paying for it when your income is enough to afford it. Importantly,
if you never attain that level of income, the _University_ eats the cost.

System 2 can lead to ever-ballooning college costs concurrent with gluts of
worthless degrees, because universities are incentivized to enroll as many
students as they can at as high a tuition rate as they can - they always get
paid.

In system 3, the university only gets paid if the student's degree turns out
to be marketable. It (hopefully) keeps costs down in a way the (1 & 2) cannot.
On the other hand, this could be terrible news for departments that issue
degrees in literature, anthropology, etc.

------
rchaud
I'm of the class of 2009, graduating at a time when even entry-level office
jobs seemed out of reach. I was an Econ major at a top US liberal arts school,
with two summer analyst (finance) positions under my belt. But even with all
that, the only full time job I was able to get was a book-keeping position
that paid $12.50/hr.

If you don't have job-ready skills (e.g., Quickbooks expertise at a small
business), your prospects are limited to big corporations that hire on the
basis of a regular recruiting schedule, provide training, onboarding etc. And
those firms ghosted completely that year.

I'm not from a rich family, so I would have much preferred to have done school
in a short-term program like this that was incentivized to help me hit the
ground running when it came to job-ready skills.

That said, what is to stop Lambda-like firms to crop up everywhere, like
bootcamps did, and promise 6-figure salaries that will never materialize? The
VC money required to finance such schools is certainly out there, but are the
jobs?

------
vivekd
This seems like a good way to focus universities on degrees and skills that
are in demand in the work place. There is growing criticism that many academic
programs lack rigour and aren't meaningfully related to the job market. Tying
the success of the institution directly to the success of the students seems
to be the ideal solution to that.

------
YeGoblynQueenne
>> What if there were a way to eliminate student debt?

The obvious answer would be "free higher education", like in most EU countries
and I believe many non-EU countries, have, and like many US institutions
offered in the past.

Unfortunately what is being proposed is insted baptising debt by another name,
so that it doesn't _sound_ like debt.

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seiferteric
I thought this was going to be a bit more radical, like a market for students
that companies would pay into. I could see something where you could take
"aptitude" tests that would get you tuition funding from a company if you
showed some signal that you could be useful to them, but I guess that's
basically just a scholarship... Also they can't force you to work for them
once you are done, so that's a problem. One thing It would be useful for
though would be to strongly signal when there is a LACK of demand in a
specific area. It might save some people a lot of heart ache and money getting
a "useless" degree.

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JamSandwich
This isn't new, we do this in the UK and it's still rubbish (but arguably
better than having a $200k student loan balloon from interest while you're
pouring coffee). Someone correct me if I missed something.

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austenallred
The school doesn't get paid if the student doesn't get a job. Pretty
different.

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cromulent
It's jarring as an English speaker to see this North American usage of the
word "tuition", as a fee rather than a service. It took a couple of seconds to
parse the title.

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mac01021
Yes. It used to be called a "tuition fee". but people are lazy and don't know
where their words come from.

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jtlienwis
I like the concept that the mining industry has developed. Its calle NSR ( net
smelter return). A company will loan money to another miner that has a deposit
but lacks money. The miner will use the money to build the mine and when they
send their ore to the smelter, will pay back a percentage of the value of that
ore to the company that loaned the money. Replace miner with student. Company
issuing the NSR with teachers.

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simplecomplex
Why not just let the market do what it wants? That’s how we got Lamda School
in the first place. That way there could be income-sharing schools like Lamda
School for trades that make financial sense. For degrees that don’t make
financial sense, students could pay for them upfront, as many already do.

The government never _had_ to be involved with financing higher education to
begin with.

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twblalock
> The government never had to be involved with financing higher education to
> begin with.

The government needed to become involved to make education affordable to
students without wealthy parents. If the market was going to take care of that
by itself, it would have happened before the government got involved.

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simplecomplex
Affordability has gotten worse since the government started giving loans. The
non-wealthy students still have to pay their tuition.

I think you might mean accessibility. Government loans do expand access, but
so does the private income sharing model. There are market-based ways to serve
the poor education, and arguably where it does it’s more affordable, and
incentivized to lift them out of poverty.

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popcorn49
App Academy was the first company to do this, many years ago.
[https://twitter.com/appacademyio/status/1082723232782868481](https://twitter.com/appacademyio/status/1082723232782868481)

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voidhorse
This is an interesting idea and generates a lot of questions.

How does this change the dynamic of 'going back to school' for an alternative
degree? If the domain I initially studied starts hurting economically and I
have to get a different degree, do I still owe the school for my initial
degree if I get a job that meets the income threshold off my second degree?
How do we determine which degree netted me my current job? (assuming I get the
new degree and a job within the N year period during which I owe the initial
institution a percentile of my income).

Am I able to 'pay out' at any time? Or, if I get a better paying job, does the
institutions paycheck increase if I'm still in the payback time interval? Do I
simply need to pay the pay cap?

Should I be comfortable with the notion that my institution is x% responsible
for my wage-earnings and overall economic worth? Are there situations in which
this isn't the case?

Does this change promote student assessments that are better or worse for the
edification of the next generation? As the article states, would schools be
tempted not to bother with 'high-risk' students? What does it mean to put a
label like 'high-risk' on a student? What does it mean to treat a human being
like an investment? Does this reduce interest in students to purely economic
terms (a big part of how universities already conceive of their students
today, but _reputation_ to some degree still factors in)? Would such a model
further exacerbate the gap between the wealthy and poor—would wealthy kids,
who grow up in environments that promote study and make them 'low-risk'
investments (likely to succeed) have an unfair advantage over kids growing up
in poor households?

This also seems to imply that one's learning is the majority of what factors
into one's getting a job. What about all the additional work it takes to get a
job (networking, etc.) Will these institutions assist in these areas as well?

What of the notion of scholarship? Is it absent in this model?

Does this model actually work for _all_ disciplines? Arguably, it creates a
very tight coupling between the 'value' of an education and wage-
earnings/income. What of those pursuits that seem to be valuable, in a
different light and aren't (today) usually high-income generators ,e.g. the
study of history, literature, and cultures, for instance. What will happen to
those disciplines under this model? Is this a model that's more appropriate
for trades and not all areas of education?

Seems like a very good change, potentially, but it will probably a lot of
effects if its adopted nationwide, on both an economic and cultural level.

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make3
Quebec (Canada) has a system like that, it's called free higher education, and
you pay with a fraction of your salary called "income tax" (it's actually 2k$
per session, not completely free)

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jon889
But some of that income tax gets lost in the education system. It would be
much efficient to just pay back to the school you went to. Then there’s no
chance of it getting spent at levels above the school.

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kraig
IMO a great idea and could flip the table on ivy league schools and other
institutions that favor political connections over an individuals potential.

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safgasCVS
So basically you just described income tax

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mac01021
Except the school only gets the money of people who attend the school.

And the school is not incentivized to sell worthless degrees because it won't
get paid when it does.

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safgasCVS
Hmm well given how essentially all salaried jobs require a degree today it’s
hard to see education as being an optional purchase for most people. Maybe 30
years ago but not today.

Hard to say what’s worthless or not - jobs change all the time. Few if anyone
would study something like Latin or philosophy if money were an incentive.

Also the idea of human knowledge being locked away for only those who can
afford it seems cruel to me

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chrisamiller
So you get an education for free, then pay back into the system after you're
in the workforce? Congratulations, silicon valley, you've just re-invented
public education!

Imagine what our public universities could look like with solid funding
increases (which would be a fraction of that 17% that this group wants to
take). They could be both free and amazing.

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jerf
"Imagine what our public universities could look like with solid funding
increases"

The reason we're having this conversation in the first place is precisely the
"funding increases" they've been experiencing. If this isn't enough "funding
increase" for them: [https://rpreschern.files.wordpress.com/2013/09/college-
tuiti...](https://rpreschern.files.wordpress.com/2013/09/college-tuition-
inflation-is-outrageous.png) then I'd have to suggest "funding" is not their
problem. What they'd look like with "solid funding increases" is pretty much
what you're seeing right now.

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zaroth
Thank you for posting this. As in healthcare, the problem isn’t so much the
inability to pay as it is that costs spiraling out of control for no added
value.

Prices tend to do this is a supply constricted market when demand is
artificially boosted by government subsidies.

