Many decades ago I received "student loans," which, combined with small jobs, allowed me to pay my way through college and graduate school. I remember thinking at the time that it would have made more (financial) sense to both schools to allow me to go through for free in return for promising to give them perhaps 1% of all my future income. I would gladly have signed on the dotted line, videotaped an acknowledgement of my promise, and then would have foregone the library job, the summer job etc. If they were right that college and postgraduate work would eventually pay off well for me, then it should logically also pay off well for them (and it would have). But that wasn't an option at the time, and I had not heard of the concept ever being implemented by any universities or colleges.
Surprisingly, this past week I saw my concept put forth in a Slate editorial by Eliot Spitzer. He calls them "income-contingent" loans and says they have been "successful and commonplace in Europe and Australia." The concept has been advocated by Milton Friedman and James Tobin - "two Nobel laureates of decidedly differing worldviews."
I don't understand why this concept hasn't been advocated more forcefully or implemented by American universities.
Maybe it puts too much pressure on the Universities to successfully educate their students?
ReplyDeleteNo kidding. I have felt that my college degree was made worthless by the poor quality of education I received. I could have taught some of the classes, and done a better job of it that their associate educators. Worse, with all of this "let's go to college" encouragement going on, we've devalued the degree. Now you can't get a janitorial job in Iowa unless you've got a bachelor's degree.
ReplyDeleteAustralia has been doing this for 15-20 years under various names...
ReplyDeleteWhen I went to Uni 5-10 years ago it was called HECS (Higher Education Contribution Scheme). All I had to pay for up front was my books and transport, and it's only until you start earning over a certain amount per year that you have to start paying in back in the form of 1-2% higher taxes. You really don't even notice it, and you even got a 20% discount if you paid it in a lump sum.
Nowadays you can still get HECS but there are a few more restrictions (like you can't go to uni forever)
I'm with anonymous, I got my University degree from HECS, and have almost paid it off now. It was a great help to my parents, I probably couldn't have afforded it myself.
ReplyDeleteNowadays degrees are more expensive and benefits are given to up-front fee payers (easier entrance mostly) but it's still possible.