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Despite things like Upstart sounding cool, selling equity in higher education is actually a horrible solution to the wrong problem. The problem in higher educa

Despite things like Upstart sounding cool, selling equity in higher education is actually a horrible solution to the wrong problem. The problem in higher education is not that it's hard to get loans, it's that doing so is far too easy thanks to government subsidies on both sides. (Like healthcare, spending other people's money is a great way to guarantee runaway costs.) A much better idea would be to eliminate the subsidies and guaranteed public lending entirely, thus removing the funding for negative-return for-profit universities.

vasilipupkin 11y ago
the problem with this idea is that we generally do want more people to get more educated, rather than a small percentage of population, especially those who can least afford it. So, perhaps rather than eliminating government subsidies, make them more targeted. Mostly, runaway costs are there because payoff to education is going up.
- morgante 11y ago
  There's no reason you need subsidies for quality education. I as a private investor would happily extend loans (with interest) for a smart student from an underprivileged background to attend an excellent non-profit university. There's a high chance of them graduating, getting a good job, and paying me back. I would not, however, give loans for a mediocre student to attend the University of Phoenix. There's very little likelihood of that leading to a better life for them (and my loan getting paid back), and I fail to see why we as a society should subsidize it. Loans are great. They allow all kinds of people who can't afford high-return investments like higher education to buy them in exchange for sharing the profits. Why do we need a subsidy to facilitate this?
newjersey 11y ago
For-profit schools also target recent veterans for their GI bill. Should we get rid of that as well?
- morgante 11y ago
  Absolutely. It's a poor use of taxpayer money to pay a for-profit school and it's a poor use of the veteran's time. In my view, the ideal way to structure these subsidies would be as tax credits. If you can successfully convince private lenders to invest in your education, taxpayers will help to foot the bill. But we shouldn't pay for arbitrarily poor programs.

vasilipupkin 11y ago

the problem with this idea is that we generally do want more people to get more educated, rather than a small percentage of population, especially those who can least afford it. So, perhaps rather than eliminating government subsidies, make them more targeted. Mostly, runaway costs are there because payoff to education is going up.

morgante 11y ago
There's no reason you need subsidies for quality education. I as a private investor would happily extend loans (with interest) for a smart student from an underprivileged background to attend an excellent non-profit university. There's a high chance of them graduating, getting a good job, and paying me back. I would not, however, give loans for a mediocre student to attend the University of Phoenix. There's very little likelihood of that leading to a better life for them (and my loan getting paid back), and I fail to see why we as a society should subsidize it. Loans are great. They allow all kinds of people who can't afford high-return investments like higher education to buy them in exchange for sharing the profits. Why do we need a subsidy to facilitate this?

newjersey 11y ago

For-profit schools also target recent veterans for their GI bill. Should we get rid of that as well?

morgante 11y ago
Absolutely. It's a poor use of taxpayer money to pay a for-profit school and it's a poor use of the veteran's time. In my view, the ideal way to structure these subsidies would be as tax credits. If you can successfully convince private lenders to invest in your education, taxpayers will help to foot the bill. But we shouldn't pay for arbitrarily poor programs.