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I have not read the NYMag article, but I personally think this approach makes a lot of sense.

My own favorite higher education reform idea is to have the gov't fund higher education by paying schools a percentage of the student's increase in W2 earnings for a period after graduation. That would avoid the 'indentured servitude' aspect, because the gov't would be paying, but would only reward schools that could increase students' W2 earnings.

To the extent that lambda school is exploring models that do something similar, it might eventually make space for a gov't funding model build around the insights they have had (like the one in this announcement, about how to pull future revenues forward to fund the school in a practical way).




There's already a highly successful model in most modern countries where the government fund all education and recovers some of the cost the higher progressive tax brackets, leaving the rest as a public good as an educated populace is a good thing.

No need for fancy securitization or business models!


There wouldn't be a need if our government was good at school execution and innovation, but it isn't.

I fully agree with gov't providing education for everyone, but it's not a panacea. Non-gov't innovation could discover really interesting models that gov't wouldn't take the risk on. We just need to make sure there's no fraud going on.


> Non-gov't innovation could discover really interesting models that gov't wouldn't take the risk on.

When it comes to education the literature is littered with failed "innovation" models that sound good but fail. In fact, we could commission research institutions (publicly owned universities!) to do the legwork...in fact many of them have varied educational models. The government merely funds them; it doesn't execute the teaching model. (And Lambda's teaching model is pretty bog-standard, all said and told)

For profit vocational schools have existed for eons. If the only novelty is the "ISA" -- which is not all that new, innovative or effective what with progressive taxation -- then what exactly are Lambda offering? Overpriced, poorly executed courses for 0-upfront cost, subsidized "teaching" by TAs w/o any actual knowledge?

The price of failure in this space is very high. It's gambling with student's futures. Fast iteration and failure recovery is not easily possible. This is not a space where VC acceleration makes sense.


The reason we should encourage new private educational models beyond publicly funded research / execution is for the same reason we do for almost everything else in the economy: the gov't and private sector have different incentive structures / possible funding modes that allow for different kinds of programs to be developed / run, sometimes both can work.

I don't see how student failure risk is higher than a 4 year degree or vocational school (i.e. the null hypothesis) - either way has time / foregone wages you spend without knowing you're going to get it back. Lambda's programs are actually less risky than a 4 year agree on a time/wage basis, and we have to see how they are on an $ ROI basis (i.e. how long is payback on the degree and how much is the net wage increase).

Also, we allow high-risk private sector stuff all the time: aerospace, automotive, medical, etc. all have literal life and death stakes beyond a school that doesn't work out. Regulation should be proportional to the risk involved, and I just don't see it with the Lambda / ISA model.

As far as what Lambda offers, it seems like they're currently the strongest executors from company growth perspective in the ISA/bootcamp space, and we'll have to see how they do on the factors I named above to see if it's effective. Being a trailblazer is high risk / high reward. I welcome their attempt.

Please correct me where you think I'm wrong. (said earnestly)


>Also, we allow high-risk private sector stuff all the time: aerospace, automotive, medical, etc. all have literal life and death stakes beyond a school that doesn't work out. Regulation should be proportional to the risk involved, and I just don't see it with the Lambda / ISA model.

Except getting yourself into huge amounts of debt $30000! is life ruining for basically everyone that Lambda is targeting.

We don't allow experiments on high risk populations with medical testing without informed consent. This was faulty in the Lambda case, where they out and out lied about their funding model. We don't allow the public to fly on planes without tons of testing. We don't allow people to drive cars that haven't passed independent crash testing.

So Lambda's ISA shouldn't be allowed to be sold to the public without independent financial advice, like any other complex debt product. And yes I think the same should apply to student loans.

You and I cannot just go and enter into a debt futures contract (well, maybe if you're an "accredited investor" i.e. rich enough to be ok if it goes south). So why do we let vulnerable folks enter into a shady financial agreement with an operator who's more concerned about growth than a good education? It's not good for society for every 1 new engineer there's 3 debt-enslaved washouts. Lambda's still profitable at those horrible numbers.

>As far as what Lambda offers, it seems like they're currently the strongest executors from company growth perspective in the ISA/bootcamp space, and we'll have to see how they do on the factors I named above to see if it's effective. Being a trailblazer is high risk / high reward. I welcome their attempt.

The problem is that their failures ruin people financially. Growth at all costs is a _bad_ thing. Going slower and getting things right is required to create a good product that first does no harm.


(1) I think you're misunderstanding the Lambda model where you don't pay the loan unless you make over a certain amount and it adjusts as a proportion of income. It's designed to get around the actual "debt enslavement" issues of the current government debt. *

(2) A few months of education isn't a plane crash or fatal drug, it's a major inconvenience, but no more than any other bad life decision people make freely all the time (taking a bad job, buying a boat, etc.). As I said, regulation needs to be proportional to the down side.

(3) If you make everything really restrictive there is no innovation. Going slow does do harm. Harm that you don't see because it's a positive externality and hence never happens and you don't see it. Growth isn't the enemy and neither is regulation, you just have to be smart about it, and I would argue you're too far on the conservative side.

* The only exception, which I believe is still unclear legally, is whether ISA aren't releasable under bankruptcy, which I would definitely oppose as a big supporter of bankruptcy law.




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