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> Another solution is to let you go to school for free and then pay a percent of all your future earnings In Australia we have a system somewhere between this
by Veratyr 9y ago
> Another solution is to let you go to school for free and then pay a percent of all your future earnings
In Australia we have a system somewhere between this and a loan.
You go to (heavily subsidized) university, tuition is paid for by the government with an automatic interest free loan.
Once you earn above a particular (somewhat generous) threshold, your employer automatically starts taking a percentage of your income (depends on income) and pays it towards the loan.
There's no interest but the loan amount is indexed against inflation.
I graduated from one of the country's top universities with $24k AUD (~$18k USD) debt to the government and paid it all off early voluntarily. It used to be that voluntary payments got you a 5% bonus but that's gone now.
- was_boring 9y agoquestion: why would you pay it off early? money (generally) gets cheaper over time and if interest is lower then inflation there is no reason to pay it off early as the debt becomes cheaper every year.
- Veratyr 9y agoI no longer live in Australia and as long as you have this debt, you're required to file an Australian tax return. I paid it off to get rid of that hassle. Also it used to be that voluntary payments got you a discount.
- stephen_g 9y agoMost people don't - they just pay the minimum required out of their pay every year once they've reached the threshold. But getting rid of it does make it easier to borrow more money for a house, etc.
- bobsman123 9y agoWe have that in the US as well. And you do have interest - variable rate tracking inflation. In the US, the minimum payment is $0 and forgiveness happens at 20 or 25 years.