Thursday, September 07, 2017

"Income Share Agreements" to Finance College

I like this more than blindly lending out money to every student, wherein 2/3rds are going to piss it away on worthless degrees.  It would take in private financial markets to determine which degrees get financed and which do not.

The problem, however, as is with many Republican/Conservative/Non-leftist solutions, is it does not simply aim for the optimal solution, and replaces a horrendous problem with a slightly less horrendous one.

Students would now be indentured servants.  Instead of letting private markets lend to engineering majors at 4% and liberal arts majors at 18%, they would own a part of that person's life long labor, which is the definition of slavery. 

A much simpler solution exists and that is privatizing all schools, getting the government out of higher education altogether, and letting private people figure their educational needs on their own. 

An even simpler solution than that, is what is slowly, but surely happening, and that is the internet (and employers) are replacing and obsoleting insanely overpriced brick and mortar schools. 

Government could have done something looooong ago to save at least 30 years of students trillions in unnecessarily high tuition.  But the politicians, like the people, are too stupid to understand basic economics and the power of a free and uninterrupted market.

Enjoy your sociology degree.


kurt9 said...

Think of "The Incorporated Man".

Pat Haney said...

I think you're missing something called "graft" here.

The gubmint took over student loans - which are in the 6% range (and up, BTW. Have a kid in school). They are peeling 2% off the top for Obamacare. That's why your home loan is <3% and college loans are 6%.

Politicians have zero interest in bringing sunlight to this, let alone fixing it.

Kristophr said...

If they indentured Women's studies majors to brothels, they could pay off their indenture faster.

Maybe Starbucks could open up a back room?

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Anonymous said...

I think that this is a solution for people who don't have money for a college education. Doesn't it work for that? You get the money from a private company that expects to be paid back. Much better than loans.

bigmo said...

The only way to bring rationality into the student loan business is to have the Colleges own the loans.
Set up a revolving loan fund and have the college manage it. Lets see how quick the schools will give out $150,000 student loans for liberal arts degrees.