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).
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).
Because when the loan is forgiven after 20 years it looks like income. So you have to pay tax on your forgiven loan. If Lambda School can’t teach you well enough that you get and keep a good paying job then they take the loss not the tax payer.
Also: advocating for keeping the old system by saying this new way is not different is the least Hacker News things I’ve ever heard. The student loan crisis is an existential crisis for America. More schools should adopt the Lambda School approach, America would be much better off.
The current model is no different to unscrupulous bankers selling loans to Wall Street or Fannie Mae: they just lure students to the school helping them fill out student aid and loans and then give them subpar educations with curriculum being taught like it has been for years but they don’t care to change or innovate because the school has already been paid by an entity — the US education department who has deep pockets.
It’s not about the payment structure alone, it’s about a school that is incentivized to make its students successful. IBR is just taxpayers swallowing the bill when schools fail.
Be aware of IBR and the promise of loan forgiveness. These are relatively new programs and the first batch of people taking advantage are actually people who work in public service/non profit (whose loans get...or are supposed to get forgiven after 10 years).
There are significant numbers showing the loan servicers engaged in fraud to prevent the forgiveness. One of the major loopholes is on an annual basis when income documents are due, the loan servicers would take extended periods to “review” the income docs and place the loans in forbearance for a month. Then when forgiveness time came they were denied for not having made payments (through no fault of their own) for 120 consecutive months essentially resetting the clock every year.
Not to mention at any given point these programs can be axed, which I’m sure they will be if there were ever a significant portion of the population who would actually qualify for the forgiveness.
> 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.
tl;dr; on that is you borrow a certain amount (that you choose, but is capped by the program). In exchange, you pledge a certain percentage of your income every month for a certain number of months (5-10 years generally) [0]. The maximum amount you'll repay is capped at 2.5x the loan amount (i.e. if you borrow $10k, you'll repay a max of $25k).
Practically speaking, the gist of the program is that it's good for students with middle income career outlooks, but terrible for students with high income career outlooks (i.e. talented CS majors) since you'll end up paying more than a traditional loan.
[0]: The percentage pledged varies by the loaned amount and major. The number of months seemingly only varies by major. You can play with the calculator here: https://compare.vemo.com/
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.
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".
> Plus, I have yet to see the evidence that colleges provide this virtuous yet intangible quality of non-economically beneficial "wholesome" education.
The biggest performance dilemma I noticed upon entering college is basic literacy. I saw most people reading at a 9th grade level, which is average for most Americans, and struggle to write a 2 page paper. That 2 page paper was hardly competent once written.
The problem was so pronounced that in order to be awarded graduation of a bachelor's degree you had to take and pass a writing competency test at any time during your undergraduate education.
In the real world, as a software developer, the biggest barrier I see to the success of many developers is basic literacy. I see so many people who cannot communicate at a professional level. They struggle to reason about the problems they encounter and struggle further to put their thoughts into words that a make sense to an outside party.
Most developers I have ever worked with spend their entire careers struggling with a variety of concerns that ultimately (when you remove the bullshit and excuses) boil down to struggles of basic code literacy. I suspect we have all encountered this when everything is an argument of code style, spaces vs tabs, OOP vs functional, and so forth. Code literacy is the difference between thinking in terms of algebra (instructions) versus thinking in terms of calculus (process). When you are literate you form visions of what you want and simply build the vision accordingly.
As somebody who rewrote their personal application from scratch last year (about 40,000 lines of code with minimal boilerplate) while also working for two separate employers and having a spouse and kids I really don't have patience for people who fill their time with literacy bullshit. As somebody currently deployed with the time military to a conflict zone this is the thing I dread most about returning to the corporate world.
Holy shit people. Pick up a damn book and read. How you communicate will influence how you write code.
> Plus, I have yet to see the evidence that colleges provide this virtuous yet intangible quality of non-economically beneficial "wholesome" education.
1) what evidence would convince you?
2) when you consider that education is a social policy, and is designed with the purpose of delivering benefit at scale, does that change your opinion? (That is, when you consider that it's meant to shift the median student's outcome more than that of the p99 student)
College is education, not training. Crucial aspects of working in the real world are learned on the job, things that how to operate in an office environment, how to collaborate, how to write, present and justify your ideas and render them into applied things. These are not things taught in university.
College education is hugely overrated, and especially by using bad reasons like that
Spare me the hyperboles, using the "well rounded" adjective makes no sense except for objects that are supposed to be round.
College is essential if you are in a regulated profession and/or is it too expensive (or impossible) to learn it yourself (like medicine, other engineerings, law, etc)
> Plus, I have yet to see the evidence that colleges provide this virtuous yet intangible quality of non-economically beneficial "wholesome" education.
You could try checking course requirements. Every college I'm aware of requires that students take classes in a variety of subjects outside their major before they can graduate.
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.
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
Won't you be incentivized to prefer quantity over quality?
You can easily scale the number of classrooms by 2x but it isn't as easy to 2x the starting salary of your graduates.
The worry here is that you will over-focus on how to market/brand yourself to capture the salary of as many people transitioning to tech as possible, rather than helping individuals maximize their potential.
I think that this is a viable model for professions where high paying jobs are available aplenty. How are you planning to scale with this narrow model? Also what is your competitive advantage? I am trying to figure out the valuation as an investor.
Hey, your startup is really good and I'm pretty sure it will be a hit. I have been thinking to implement such a system myself and I have done plenty of basic research on this topic. The idea comes at the right time.
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.
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.
>Good. This does exactly what Nasim Taleb argues and forces the college to have "skin in the game."
This philosophy operates under the assumption that colleges should be beholden to an economic system that values individuals solely for their ability to grow existing capital.
It's a recipe for cultural stagnation.
Where do we develop entirely new modes of thought and expression [and potential new sources of wealth] if we deprioritize every activity other than those that optimize for the growth of existing wealth?
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.
> 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.
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.
It turns out that people usually work more than a few years, and their salaries rise over time. It would be counterproductive not to negotiate the highest salary you could (because you'll probably go upwards from there).
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?
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.
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
You don't pay anything back until you're making at least $50k a year. Not sure what the life of the contract is, but I've been following the Lambda school guys on Twitter for a while and they seem very focused on a 2-3 year payback.
A lot of the criticism of Lambda School seems like unfairly comparing some ideal of education with their model, rather than comparing the current reality, which is colleges that frequently leave people in $30k + worth of student debt with no guarantee of a job afterwards, and that's before we talk about the years you sink into it. Then there are the learn to code bootcamps which seem to be garbage in general.
I'd be willing to bet for most of us, paying 17% of our income (once we made $50k) a year, for two years, is a vastly preferable to whatever we've paid.
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.
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.
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?
"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.
I was thinking exactly the same, although a bit less passive agressive in the tone :)
In Denmark (where I'm from), there is a system where education is free. There are private schools, but to my knowledge no private universities. Your entry ticket to a university is your grade from high-school. You actually get some money while studying. You can still chose to do a studen loan on top of that, but typically people come out of university with maximum $20k in debt most way less.
I have many friends that are absolutely brilliant and successful, who would probably not have been able to afford a university degree.
One thing is what that does to the crazy debt many people get in other countries, but think about what it does for low-income areas, immigrant and integration and general inequality of a population.
By all means, Denmark is not perfect. But I think we nailed it with access to education.
And yes. Our tax pressure is pretty high. But surprisingly not that much higher than for example California and NY.
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?
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.
>> 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.
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.
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.
[+] [-] atiredturte|7 years ago|reply
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...
[+] [-] mdasen|7 years ago|reply
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).
[+] [-] gigatexal|7 years ago|reply
Also: advocating for keeping the old system by saying this new way is not different is the least Hacker News things I’ve ever heard. The student loan crisis is an existential crisis for America. More schools should adopt the Lambda School approach, America would be much better off.
The current model is no different to unscrupulous bankers selling loans to Wall Street or Fannie Mae: they just lure students to the school helping them fill out student aid and loans and then give them subpar educations with curriculum being taught like it has been for years but they don’t care to change or innovate because the school has already been paid by an entity — the US education department who has deep pockets.
[+] [-] austenallred|7 years ago|reply
It’s not about the payment structure alone, it’s about a school that is incentivized to make its students successful. IBR is just taxpayers swallowing the bill when schools fail.
[+] [-] will_brown|7 years ago|reply
There are significant numbers showing the loan servicers engaged in fraud to prevent the forgiveness. One of the major loopholes is on an annual basis when income documents are due, the loan servicers would take extended periods to “review” the income docs and place the loans in forbearance for a month. Then when forgiveness time came they were denied for not having made payments (through no fault of their own) for 120 consecutive months essentially resetting the clock every year.
Not to mention at any given point these programs can be axed, which I’m sure they will be if there were ever a significant portion of the population who would actually qualify for the forgiveness.
[+] [-] austenallred|7 years ago|reply
So you very possibly could pay Lambda School $0.
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] kevindong|7 years ago|reply
tl;dr; on that is you borrow a certain amount (that you choose, but is capped by the program). In exchange, you pledge a certain percentage of your income every month for a certain number of months (5-10 years generally) [0]. The maximum amount you'll repay is capped at 2.5x the loan amount (i.e. if you borrow $10k, you'll repay a max of $25k).
Practically speaking, the gist of the program is that it's good for students with middle income career outlooks, but terrible for students with high income career outlooks (i.e. talented CS majors) since you'll end up paying more than a traditional loan.
[0]: The percentage pledged varies by the loaned amount and major. The number of months seemingly only varies by major. You can play with the calculator here: https://compare.vemo.com/
Purdue's program: https://www.purdue.edu/backaboiler/index.php
[+] [-] deepnotderp|7 years ago|reply
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|7 years ago|reply
[+] [-] austincheney|7 years ago|reply
The biggest performance dilemma I noticed upon entering college is basic literacy. I saw most people reading at a 9th grade level, which is average for most Americans, and struggle to write a 2 page paper. That 2 page paper was hardly competent once written.
The problem was so pronounced that in order to be awarded graduation of a bachelor's degree you had to take and pass a writing competency test at any time during your undergraduate education.
In the real world, as a software developer, the biggest barrier I see to the success of many developers is basic literacy. I see so many people who cannot communicate at a professional level. They struggle to reason about the problems they encounter and struggle further to put their thoughts into words that a make sense to an outside party.
Most developers I have ever worked with spend their entire careers struggling with a variety of concerns that ultimately (when you remove the bullshit and excuses) boil down to struggles of basic code literacy. I suspect we have all encountered this when everything is an argument of code style, spaces vs tabs, OOP vs functional, and so forth. Code literacy is the difference between thinking in terms of algebra (instructions) versus thinking in terms of calculus (process). When you are literate you form visions of what you want and simply build the vision accordingly.
As somebody who rewrote their personal application from scratch last year (about 40,000 lines of code with minimal boilerplate) while also working for two separate employers and having a spouse and kids I really don't have patience for people who fill their time with literacy bullshit. As somebody currently deployed with the time military to a conflict zone this is the thing I dread most about returning to the corporate world.
Holy shit people. Pick up a damn book and read. How you communicate will influence how you write code.
[+] [-] jessedhillon|7 years ago|reply
1) what evidence would convince you?
2) when you consider that education is a social policy, and is designed with the purpose of delivering benefit at scale, does that change your opinion? (That is, when you consider that it's meant to shift the median student's outcome more than that of the p99 student)
[+] [-] aaaaaatttuyy|7 years ago|reply
[+] [-] raverbashing|7 years ago|reply
College education is hugely overrated, and especially by using bad reasons like that
Spare me the hyperboles, using the "well rounded" adjective makes no sense except for objects that are supposed to be round.
College is essential if you are in a regulated profession and/or is it too expensive (or impossible) to learn it yourself (like medicine, other engineerings, law, etc)
For other areas? Not so much
[+] [-] daveFNbuck|7 years ago|reply
You could try checking course requirements. Every college I'm aware of requires that students take classes in a variety of subjects outside their major before they can graduate.
[+] [-] austenallred|7 years ago|reply
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|7 years ago|reply
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
[+] [-] zawerf|7 years ago|reply
You can easily scale the number of classrooms by 2x but it isn't as easy to 2x the starting salary of your graduates.
The worry here is that you will over-focus on how to market/brand yourself to capture the salary of as many people transitioning to tech as possible, rather than helping individuals maximize their potential.
[+] [-] malshe|7 years ago|reply
I think that this is a viable model for professions where high paying jobs are available aplenty. How are you planning to scale with this narrow model? Also what is your competitive advantage? I am trying to figure out the valuation as an investor.
[+] [-] agentphil|7 years ago|reply
[+] [-] noetic_techy|7 years ago|reply
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|7 years ago|reply
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.
[+] [-] omegaworks|7 years ago|reply
This philosophy operates under the assumption that colleges should be beholden to an economic system that values individuals solely for their ability to grow existing capital.
It's a recipe for cultural stagnation.
Where do we develop entirely new modes of thought and expression [and potential new sources of wealth] if we deprioritize every activity other than those that optimize for the growth of existing wealth?
[+] [-] pjc50|7 years ago|reply
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|7 years ago|reply
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|7 years ago|reply
[+] [-] rossjudson|7 years ago|reply
[+] [-] austenallred|7 years ago|reply
[+] [-] rland|7 years ago|reply
WHY do we need this never ending whirlpool of sophisticated financial schemes to take care of this problem?
[+] [-] wbronitsky|7 years ago|reply
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.
[+] [-] popcorn49|7 years ago|reply
[+] [-] RunawayGalaxy|7 years ago|reply
[+] [-] 1999|7 years ago|reply
[+] [-] austenallred|7 years ago|reply
[+] [-] Shivetya|7 years ago|reply
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|7 years ago|reply
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.
[+] [-] seem_2211|7 years ago|reply
A lot of the criticism of Lambda School seems like unfairly comparing some ideal of education with their model, rather than comparing the current reality, which is colleges that frequently leave people in $30k + worth of student debt with no guarantee of a job afterwards, and that's before we talk about the years you sink into it. Then there are the learn to code bootcamps which seem to be garbage in general.
I'd be willing to bet for most of us, paying 17% of our income (once we made $50k) a year, for two years, is a vastly preferable to whatever we've paid.
[+] [-] lordnacho|7 years ago|reply
Here's some thought on debt and equity: https://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theo...
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|7 years ago|reply
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.
[+] [-] utdiscant|7 years ago|reply
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)
[+] [-] nonsince|7 years ago|reply
[+] [-] mac01021|7 years ago|reply
"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.
[+] [-] MartinAlbertsen|7 years ago|reply
In Denmark (where I'm from), there is a system where education is free. There are private schools, but to my knowledge no private universities. Your entry ticket to a university is your grade from high-school. You actually get some money while studying. You can still chose to do a studen loan on top of that, but typically people come out of university with maximum $20k in debt most way less.
I have many friends that are absolutely brilliant and successful, who would probably not have been able to afford a university degree.
One thing is what that does to the crazy debt many people get in other countries, but think about what it does for low-income areas, immigrant and integration and general inequality of a population.
By all means, Denmark is not perfect. But I think we nailed it with access to education.
And yes. Our tax pressure is pretty high. But surprisingly not that much higher than for example California and NY.
Martin
[+] [-] unknown|7 years ago|reply
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[+] [-] rchaud|7 years ago|reply
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|7 years ago|reply
[+] [-] YeGoblynQueenne|7 years ago|reply
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.
[+] [-] seiferteric|7 years ago|reply
[+] [-] JamSandwich|7 years ago|reply
[+] [-] austenallred|7 years ago|reply