by Grand Forks Herald
April 15, 2012 at 5:51 pm in Grand Forks Herald
University of California-Riverside students have developed a proposal that could upend the way Americans pay for college educations. Continue Reading
Tags: college, Editorials, human capital contracts, income, Opinion, tuition, university of california-riverside, updates 11 Comments »
I’m not sure why this is being presented as a “future, ONLY way to pay for college. Why can’t both funding models co-exist. They state that, “Parents no longer would be able to pay tuition in full, a practice that lets rich students graduate debt-free.” Why is this considered bad? I sense a philosophical viewpoint in the author of this article that disturbs me. Why are we asked to look down on those who pay out of pocket as compared to those who get loans to pay for this?
I’d argue that both approaches could co-exist. Somewhat like buying or leasing a car. Either pay up-front or lease with 5% per year over 20 years.
Would this ruin the economics of their proposal? Those who expect to make higher salaries would tend to opt to re-pay. Could the lower-paying degree programs no longer cover their costs with only 5% per year for 20 years?
Interesting concept and worth considering. I just think it could co-exist with a modified (less government support for loans) version of today’s funding model.
Like or Dislike: 6 1
This idea has some merit but forcing those who could pay for the costs now into this program will just result in them leaving the state and attending college there. Remember the “rich” have the resources to go to any state to attend college. They do not have to sign up to payout for 20 years after graduation. But their leaving will just drive up the costs for those remaining.
Like or Dislike: 4 0
” Under their plan, California colleges would be “free” — that is, the schools wouldn’t charge tuition at all.”
I’ve noticed that over the years people have come to believe that when they incur no out of pocket expense for something it’s “free.” It isn’t, of course. Someone else is paying for it. As for this plan, what mechanism needs to be instituted to make sure the students actually meet their pledge? To whom do they submit their tax forms to substantiate their income claim?
Like or Dislike: 2 0
Well 5% of income over 20 years really isn’t free, so that statement is just plain false. That is a good thing, because we don’t tend to value things that are given to us. That is one reason my kids will graduate college with student loan debt. Makes them work harder in school so they CAN get a job becuase they will have obligations that need to be met.
There are also lots of little problems to be figured out.
1.) How do you motivate students to actually finish? Is it 5% if you finish in 4 years, 6% after 5 years, 7% after 6 years?
2.) What about those who start and don’t finish?
3.) What about those who finish, then choose to become full-time parents?
4.) They claim most people will have more than one occupation/career in their lifetime. For those who change careers, who pays for the 2nd degree? Is that now 10% of salary?
5.) What about master’s degrees? PHDs?
6.) What about bankrupcy?
Like or Dislike: 4 1
Everything old is new again.
Welcome to Indentured Servitude, the debt of the future.
Like or Dislike: 5 0
One disturbing thing about the idea is that the connection between the value of the purchase and the cost has been broken. Two people can take the same classes, learn the same thing, get the same diploma and pay drastically different amounts for the same thing. The cost is now based on the income of the purchaser and not on the value of what has been purchased. What motivates the seller to provide a quality product? The more I think about it, the less I like the concept.
I would imagine that this sort of system would not appeal to students majoring in disciplines which offer next to nothing after graduation: gender and race studies, the Humanities, Fine Arts. While the STEM subjects, with their high starting salaries, have an advantage.
Other way around? If you’re in a discipline where you don’t expect a decent paycheck–your college tuition will be five percent of nothing.
You’re on track to be a pro athelete or highly-paid professional–you’d prefer to pay the “real” cost rather than 5% of multi-million-dollar salaries.
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An athlete is likely on scholarship, so pays nothing anyway.
Have to answer this before I leave. My point was that a STEM major will have a much higher income and thus the 5% won’t affect his standard of living as much. So if he starts at 100K, he’ll still have 95K after paying the university. A Feminist Studies major is pretty much doomed to 25K, which leaves 23,750.
Don’t let NitWhitty win Gene. You have many more friends than foes on here.
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