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Brilliant, I've long thought that all universities should run under this model (although when applied to the humanities I can hear in my head the 3000 years of
by omalleyt 9y ago
Brilliant, I've long thought that all universities should run under this model (although when applied to the humanities I can hear in my head the 3000 years of the land owning, non-laboring intelligentsia protesting about the noble virtues of an education uncorrupted by the banalities of productive yada yada...) But anyway back to CS.
1) Risk is pooled in the institution rather than distributed amongst the students, which is the textbook way to deal with uncorrelated risk.
2) The incentive of the university and the student are aligned as much as possible
3) By putting costs and benefits into a form with equal time horizons, disadvantaged students no longer need to rely on the generosity of governments or private lenders for upfront cash.
The only thing I'd always questioned was whether such a scheme as described above could pass legal muster, as it bears a resemblance to involuntary servitude, as well as requiring access to income statements. I've never heard of anyone but the govt placing liens on income. I'm hoping a workaround has been found, because from a strictly incentive based analogy, this model has the potential to do to modern education what patent law did to manufacturing
- nickwalter 9y agoWhat did patent law do to manufacturing?
- austenallred 9y agoAmen :) > The only thing I'd always questioned was whether such a scheme as described above could pass legal muster Income share agreements are all-but blessed, at least in the US, and in Australia they pretty closely mirror how most student loans work. > It bears a resemblance to involuntary servitude The concerns of indentured servitude go away when you realize each student can live or work or do whatever they'd like, they willingly enter into the agreement, etc. We obviously want them to get a high-paying job, and it's in both of our best interests for them to do so.
- omalleyt 9y agoAwesome, that's great to hear. And I completely agree with your last paragraph, my concern (without knowing the relevant laws) was always just what a judge would hear. Really glad to see someone doing this
- aphextron 9y ago>Brilliant, I've long thought that all universities should run under this model I strongly disagree. Let universities be universities. The point of a university is to develop your mind, not train for a job. There's no reason we cannot have a parallel vocational system which teaches people practical skills. Let the market decide which one better serves students.
- austenallred 9y agoIf that's what universities are, that's fine, but I'd argue that's not why the vast majority of students attend a University.
- aphextron 9y agoCompletely agreed. The US needs a robust vocational system a la Germany to fill in the gaps.
- spraak 9y ago> The point of a university is to develop your mind, not train for a job. I think that's true in practice, but not in most university's marketing, or even the general cultural/social attitude towards going to university, which is in general viewed as the surest path to the best job. > Let the market decide which one better serves students. Most universities exist outside of the market in how they receive funding etc.
- deleted 9y ago[deleted]
- jedberg 9y ago>I've long thought that all universities should run under this model I did too, until I though about it a bit more. You'd end up with Universities cutting all of their "non-profitable" majors, but those things still have some value to society. Perhaps a hybrid model, where the "profitable" majors are free but you pay afterwards, and the unprofitable ones you pay up front.
- omalleyt 9y agoSure, I'd be good with that. I also think that if there are some things that are non-profitable but still valuable to society (and no doubt, there are), then the problem is really that the agent isn't capturing enough of the value they are creating for society, and society ought to find an incentive mechanism that changes that. But since we live in a practical world and that is an impractical demand, I agree a hybrid model would be beneficial
- sigstoat 9y ago> Sure, I'd be good with that. I also think that if there are some things that are non-profitable but still valuable to society (and no doubt, there are), then the problem is really that the agent isn't capturing enough of the value they are creating for society more likely (and IMO obviously, when you make this more concrete), educational institutions are overproducing the unprofitable degrees. for instance, if some degree X is "unprofitable", do we really need to produce new PhDs in it at well above the replacement rate + population growth? that'd be maybe a handful of new PhDs per professor's _lifetime_. then maybe enough undergrads to ensure there's some competition for the PhD pipeline, and that should be about it.
- omalleyt 9y agoWell, that's the problem with the status quo, that wouldn't be the problem if universities switched to an income sharing strategy as proposed. I was assuming we were talking about "unprofitable"-but-valuable majors in a world in which income sharing has been implemented
- Grustaf 9y ago>it bears a resemblance to involuntary servitude Surely this is a typo, you mean voluntary servitude? But even so, if 17% can be considered servitude, then income tax would be involuntary servitude.