Getting InPaying for College: 5% of Salary for 20 years

[Throckmorton]

I wonder if you have to pay 5% for 20 years even if you can only get a job at Walmart?

That's the whole point. It gives the school a stake in your employability. If they don't want 5% of a Wal Mart wage, they shouldn't graduate Wal Mart workers.

 

[CycloWizard]

This proposal is moot as it would lead to a short-term cashflow problem for any university that adopted it. California is already experiencing such a problem, and this would simply compound it further.

 

[xBiffx]

That's the whole point. It gives the school a stake in your employability. If they don't want 5% of a Wal Mart wage, they shouldn't graduate Wal Mart workers.

You still have the choice to work at Wal-Mart. The school would be screwed if graduates made terrible choices. How are you going to stop the freedom to make dumb choices?

 

[BoberFett]

You would need to build a time machine and go back to the early 70s and under.

You are correct, Thanks to our lemon socialist government, private industry is being subsidized by the taxpayers so they get pre trained employees.

The employee take on all the risk, so does the taxpayer in this country and the private companies get the risk free reward.

Back in the olden days, capitalism meant you take the risk to reap the reward. No lemon socialism.

Precisely. As usual, the problem is government wanting to get it's fingers into everything, not capitalism.

 

[LurkerPrime]

This actually doesn't seem like that bad of an idea. It makes the university care alot more about your current job prospects once you graduate. It would also be nice to know if this is 5% off my pre-tax income, or 5% of my takehome pay. If this was also tax deductable this wouldnt be that bad at all.

I have no idea how they would enforce such a thing, maybe require a copy of your W-2 or tax return every year? I do know it would suck ass to have to fork out 5% of your salary at the end of every year if this wasn't auto-deducted from every paycheck.

 

[tydas]

This proposal is moot as it would lead to a short-term cashflow problem for any university that adopted it. California is already experiencing such a problem, and this would simply compound it further.

Wouldn't say its moot, you could roll this out over several years and start with a small percentage of students, it could take a while to get to optimal cash flow. You would obviously need some safegaurds (agreements to attatch salary), insurance against death and other controls and safegaurds.

 

[cybrsage]

How about we shift the burden of the education from the employee to the employer?

Since the employer is profiting the most from the employees educations, doesn't it make sense that the employer pays for the education?

My employer pays for training and testing provided it is relevant to my job or another internal job that needs filling. I will not work for an employer who does not do this, unless I have no other option available.

 

[piasabird]

Assuming a salary of $50,000.00 annually that would be $50,000.00 after 5% for 20 years. How many colleges are you going to tuition low enough to qualify? Keep in mind that you have to account for future value of money and interest paid. Also keep in mind that all of this money is not owed to the bank but to the federal government. This is just asking for an Education Funding default to happen. It is probably happening already. This would not even work for Maters or doctorate. It might work better if there was a plan to use the first two years in a community college, and then force universities to accept a lower tuition rate.

You have to know what the completion rate is for individual programs of study, and what the current default rate is. A certain percent of students will not ever graduate and drop out. Of those that graduate, many of these people will not find a good paying job and end up with a job that is barely more than minimum wage or no job at all. Statistically, there may be a way to calculate this.

So I think that %7 - %10 is more realistic. However, I think that may be overpaying for some things. You can become an RN in 2-3 years at a community college.

I work at a community college and I scan documents in Financial Aid and Enrollment, so I know a little bit about education costs. My son is also attending Brigham Young University and is employed full-time while going to school. Even with help most students and family have a hard time paying the bills. There are so many other costs that need to be paid for like transportation, Insurance, Room and Board, Medical, etc.

 

[Throckmorton]

You still have the choice to work at Wal-Mart. The school would be screwed if graduates made terrible choices. How are you going to stop the freedom to make dumb choices?

Why would you choose to work at Wal Mart when you could have a higher paying job?

 

[halik]

Very interesting idea...

http://www.businessweek.com/bschool...ying_for_college_delaying_the_inevitable.html

"How much of your annual salary would you be willing to fork over in exchange for a college education? A group in California thinks it should be 5 percent for the first 20 years after graduation.

Fix UC is the group making this bold proposal. The organization consists of the editorial board of the Highlander student newspaper at UC Riverside, which is part of a UC system that had more than its share of financial troubles during the recession and where tuition has nearly quadrupled in the last 10 years. After nine months in the incubation phase, the proposal—dubbed the UC Student Investment Proposal—was published today, and goes before the Board of Regents next week.

Here’s how it would work. Once fully implemented, UC students would pay nothing to attend—no tuition, no fees, no housing. Instead, they would pay a portion of their annual salary every year for 20 years. For most students it would be a flat 5 percent. Out-of-state students and those who avail themselves of on-campus housing would pay more. If you transferred into the UC system, stayed in California after graduation, or went to work in the public sector, you’d pay less. And if you transferred out (or dropped out) you’d have to pay tuition for your time as a UC student immediately."

Yes,
what we need is more people subsidies for worthless majors. Starbucks barista with 16th century english poetry with be paying 5% on 25K a year, subsidized by every kid with a real major.

 

[halik]

So we'll have a successful person making 200k = 200k over 20 years of payment
While the 50k salary pays 50k over 20 years for the exact same product.

Sounds like robbery to me.

I hope they do it, so they learn about the concept of "adverse selection" first hand.

All the students with worthwhile majors will go elsewhere, all liberal arts/humanities/* majors will flock to cali and their tuition revenue will go to shit.

Although I suppose they could just can the low revenue majors also.

 

[WhipperSnapper]

So we'll have a successful person making 200k = 200k over 20 years of payment
While the 50k salary pays 50k over 20 years for the exact same product.

Sounds like robbery to me.

How is it robbery? The colleges receive payment based on the real-world practical income-earning value of the education they provide.

If this form of funding were enacted for all colleges and universities it would restore free market forces to higher education. Colleges would have an incentive to only educate people in fields where there is a real need for college graduates and they would have an incentive not to engage in college graduate overproduction. (Goodbye Women's Studies major, etc.)

If anything, our current system is a form of robbery--robbery of taxpayers when the federal government is left holding the tab for defaulted student loans. Right now our government is providing essentially an unlimited amount of loans for education in any field regardless of whether such education has a return on investment or is actually needed by our society.

I'm all in favor of restoring market forces to higher education. As things stand right now, there's no way for the market to communicate to colleges and universities that we have too many graduates in certain fields.

I love the idea of funding colleges using a contingency system--they would receive payment based on the practical real-world economic value of the college education they provide.

 

[Bitek]

This would ensure schools had their students' success in mind, and would link the demand for certain professions to the supply of trained individuals.

No longer would they be producing way more lawyers than the market demanded. They'd recruit more science teachers and fewer social studies teachers... I think it'd be a great way to go.

There'd be more competition for the philosophy spots in school and it wouldn't be the "oh, I don't know what to take, so I'll major in philosophy" degree.

Yeah that's why I think this is a clever idea. The Uni has to have a stake in the students future. It can't load up on a thousand kids taking Com degrees who grad with 10ks worth of debt only to be useful as a barista. U of Phoenix would hate this.

Gives a break to kids that are miseducated and are pumped into worthless degrees. Strong incentives for the Unis to train to the market.

 

[Jaepheth]

I can see this leading to administrations capping the number of liberal arts students and expanding science/engineering/medical programs to try and pump out more high income graduates.

I approve.

 

[Infohawk]

Basically, another form of the student loan.

Exactly.

We already have student loans. If anything, they are too easy to get. The cost of education needs to go down.

 

[bfdd]

The correct answer is none, but it might help actually produce productive people vs overpriced degree mills we have today.

 

[Patranus]

Stupid.
So someone wastes $200 grand on getting an "art" degree and then goes on to make 30k per year for 20 years?

So the taxpayers would be out $170,000?

Seems like a great use of the public education system.

 

[xBiffx]

Why would you choose to work at Wal Mart when you could have a higher paying job?

My previous post had nothing to do with desire. But quite simply, people make dumb decisions. Just because they are college educated doesn't make them immune to this. So the schools are taking on a substantial amount of liability with people's choices after they graduate.

Also, some degrees, lets face it, are completely worthless and won't guarantee a job let alone a good paying one. These degrees, often aren't any cheaper. So it maybe that the only job you can land is a Wal-mart like position due to the worthlessness of your degree. Of course, the schools could just offer degrees with a purpose and eliminate the underwater basket-weaving type degrees. I'm all for that.

 

[Throckmorton]

My previous post had nothing to do with desire. But quite simply, people make dumb decisions. Just because they are college educated doesn't make them immune to this. So the schools are taking on a substantial amount of liability with people's choices after they graduate.

Also, some degrees, lets face it, are completely worthless and won't guarantee a job let alone a good paying one. These degrees, often aren't any cheaper. So it maybe that the only job you can land is a Wal-mart like position due to the worthlessness of your degree. Of course, the schools could just offer degrees with a purpose and eliminate the underwater basket-weaving type degrees. I'm all for that.

That's the whole point... To give schools an incentive to NOT let students get stupid degrees.

 

[xBiffx]

That's the whole point... To give schools an incentive to NOT let students get stupid degrees.

I'm all for that but I've seen plenty take a worthwhile degree and waste it. So again, the school is getting screwed there when they could have received 5% of a decent salary but because the graduate was an idiot, they get 5% of crap.

 

[Throckmorton]

I'm all for that but I've seen plenty take a worthwhile degree and waste it. So again, the school is getting screwed there when they could have received 5% of a decent salary but because the graduate was an idiot, they get 5% of crap.

So the school shouldn't be exposed to risk? That's your argument?

 

[herm0016]

They would go bankrupt that way. Think of all the liberal arts students. Unless McDonalds counts as being related to that degree, these students will get their eductation for free.

a bunch of journalism and English majors made this up. the school would go bankrupt!

i am not for this. i am certain that i would pay much more this way.

i would have paid them about 20,000 in my first 3 years working.

interesting proposal, but i think it would have to have a cap 75k or so for a 4 year with housing. This is redistribution of college costs to the high paying fields.

it would give the school great incentive to actually teach people useful skills and keep a good reputation to increase their students salaries though.

 

[xBiffx]

So the school shouldn't be exposed to risk? That's your argument?

Risk is one thing but this idea almost guarantee's they lose money. If this were implemented, you can expect to see a lot less programs/degrees, schools, and graduates. That in turn drives up the cost of higher education because it would be harder and harder to get in and stay in. How is that going to help anything?

This sounds like nothing more than institutions betting on their graduates.

 

[Fern]

Very interesting idea...

http://www.businessweek.com/bschool...ying_for_college_delaying_the_inevitable.html

"How much of your annual salary would you be willing to fork over in exchange for a college education? A group in California thinks it should be 5 percent for the first 20 years after graduation.

Fix UC is the group making this bold proposal. The organization consists of the editorial board of the Highlander student newspaper at UC Riverside, which is part of a UC system that had more than its share of financial troubles during the recession and where tuition has nearly quadrupled in the last 10 years. After nine months in the incubation phase, the proposal—dubbed the UC Student Investment Proposal—was published today, and goes before the Board of Regents next week.

Here’s how it would work. Once fully implemented, UC students would pay nothing to attend—no tuition, no fees, no housing. Instead, they would pay a portion of their annual salary every year for 20 years. For most students it would be a flat 5 percent. Out-of-state students and those who avail themselves of on-campus housing would pay more. If you transferred into the UC system, stayed in California after graduation, or went to work in the public sector, you’d pay less. And if you transferred out (or dropped out) you’d have to pay tuition for your time as a UC student immediately."

So if after graduation these students aren't making much will the profs & staff take a pay cut, or will the taxpayers bear the shortfall?

Sounds like a dumb idea to me.

Pay for what you get, and make sure you get what you paid for.

Fern

 

[the DRIZZLE]

How is it robbery? The colleges receive payment based on the real-world practical income-earning value of the education they provide.

If this form of funding were enacted for all colleges and universities it would restore free market forces to higher education. Colleges would have an incentive to only educate people in fields where there is a real need for college graduates and they would have an incentive not to engage in college graduate overproduction. (Goodbye Women's Studies major, etc.)

If anything, our current system is a form of robbery--robbery of taxpayers when the federal government is left holding the tab for defaulted student loans. Right now our government is providing essentially an unlimited amount of loans for education in any field regardless of whether such education has a return on investment or is actually needed by our society.

I'm all in favor of restoring market forces to higher education. As things stand right now, there's no way for the market to communicate to colleges and universities that we have too many graduates in certain fields.

I love the idea of funding colleges using a contingency system--they would receive payment based on the practical real-world economic value of the college education they provide.

Market forces can be restored by using banks as intermediaries if the government guarantee on student loans is removed and by better disclosure from the schools.