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Pullout: "We had one student on the edge of homelessness, was $400 short on bills and almost had to quit because of that. I personally loaned him the money, a

Pullout: "We had one student on the edge of homelessness, was $400 short on bills and almost had to quit because of that. I personally loaned him the money, and his income moved from $10/hr to $70k+/yr. It only took $400, but he didn’t have anywhere to get that from. Insane."

icebraining 9y ago
It's self-contradictory - he did have somewhere to get it from :) I'm only half-joking; I think the problem here is lack of information. That the student was likely to move from $10/h to $70k/y is something that the teachers might know, but random lenders probably don't. On the other hand, I don't know if I want to see financial companies partnering with schools to provide loans - seems ripe for abuse.
- michaelbuckbee 9y ago
  You're describing one of the other points he makes in this: as bad as you think for profit education is, it's worse. Austen has been railing against places like University of Phoenix, etc for a while as what's been discovered about them is just nuts. The stat that stood out for me was that at one point they had a substantial number of recruiters (thousands) but exactly zero job placement staff.
- kthejoker2 9y ago
  The school should partner with one of those "we invest in you in return for 1% of your life earnings" hedge funds. That way it'd have easy access to short-term capital needs like this.
  - austenallred 9y ago
    OP here. We are a school that is completely free and takes a percentage of income (though for two years, not for life). Even still the $400 to make it through the last month was a barrier. We’re working on having a fund available for living expenses, but “I’m going to pay you cash so you can go to school” is a different risk profile than “This School is free until you’re hired.”
    - kthejoker2 9y ago
      That's awesome. The only reason the school should take the burden is to distribute the risk pool and also theyre the most capable of providing some value framework on whether this $400 or that $400 is a better investment. I personally would loan money for this sort of thing if there was a reasonable ROI and someone vetting the students.
- austenallred 9y ago
  Lenders aren’t very good at quantifying future changes in income. They’re trying, but it’s a hard problem to solve.
bane 9y ago
I don't think it's that surprising. Anecdote: Right after I barely graduated from High School after my family clawed its way out of homelessness, I spent a few years working minimum wage jobs with long commutes in an old car. I could barely afford gas and groceries let alone decent housing and college. After about 3 years of work, I managed to scrape together just enough to enroll in my local community college for two semesters, one class per semester. Total cost? At that time about $400 including books. And that $400 could have vaporized with one flat tire, or one visit to the doctor. An acquaintance of my parents heard that I was going to college, suddenly took an interest and hired me sight unseen to come work at his startup in an entry-level developer job at 3x my then current pay. I worked there for a couple years and when I was close to finishing college, another acquaintance hired me and doubled my pay. After that I was attached to a growing career and haven't looked back. But it all started with getting that tiny little bit of money together.
- mcherm 9y ago
  It is incredibly surprising. You aren't surprised because you have experienced this. But any economist would look at this and say something like this: > You claim that there are people where an investment of $400 would > quickly (within a couple of years) give them a salary increase in > the range of $20,000 to $50,000 per year. That is obviously untrue. > If it WERE true, then at lease ONE person in the country would have > spent $4,000 to seed a 10-person program which granted the $400 in > exchange for a promise to contribute $8,000 back in a couple of > years. A x20 replication factor would easily swamp administrative > costs and participants who refuse to pay afterward and the program > would still be growing exponentially. I think the source of the fallacy is that while there ARE people for whom $400 is a difficult-to-surmount barrier beyond which no other major impediments stand between them and middle-class success, they are an impossible-to-find minority in a sea of people who are willing to ASK for $400 and those for whom $400 is a major impediment, but further impediments would prevent them from succeeding. Alternately, we can look at the literally thousands of charities (including schools themselves) that offer merit-based and need-based scholarships, and conclude that the economist is partly right and the system DOES exist, but isn't meeting all of the need.
twblalock 9y ago
Why couldn't that student take out a student loan, like most students?

icebraining 9y ago

It's self-contradictory - he did have somewhere to get it from :) I'm only half-joking; I think the problem here is lack of information. That the student was likely to move from $10/h to $70k/y is something that the teachers might know, but random lenders probably don't. On the other hand, I don't know if I want to see financial companies partnering with schools to provide loans - seems ripe for abuse.

michaelbuckbee 9y ago
You're describing one of the other points he makes in this: as bad as you think for profit education is, it's worse. Austen has been railing against places like University of Phoenix, etc for a while as what's been discovered about them is just nuts. The stat that stood out for me was that at one point they had a substantial number of recruiters (thousands) but exactly zero job placement staff.
kthejoker2 9y ago
The school should partner with one of those "we invest in you in return for 1% of your life earnings" hedge funds. That way it'd have easy access to short-term capital needs like this.
- austenallred 9y ago
  OP here. We are a school that is completely free and takes a percentage of income (though for two years, not for life). Even still the $400 to make it through the last month was a barrier. We’re working on having a fund available for living expenses, but “I’m going to pay you cash so you can go to school” is a different risk profile than “This School is free until you’re hired.”
  - kthejoker2 9y ago
    That's awesome. The only reason the school should take the burden is to distribute the risk pool and also theyre the most capable of providing some value framework on whether this $400 or that $400 is a better investment. I personally would loan money for this sort of thing if there was a reasonable ROI and someone vetting the students.
austenallred 9y ago
Lenders aren’t very good at quantifying future changes in income. They’re trying, but it’s a hard problem to solve.

bane 9y ago

I don't think it's that surprising. Anecdote: Right after I barely graduated from High School after my family clawed its way out of homelessness, I spent a few years working minimum wage jobs with long commutes in an old car. I could barely afford gas and groceries let alone decent housing and college. After about 3 years of work, I managed to scrape together just enough to enroll in my local community college for two semesters, one class per semester. Total cost? At that time about $400 including books. And that $400 could have vaporized with one flat tire, or one visit to the doctor. An acquaintance of my parents heard that I was going to college, suddenly took an interest and hired me sight unseen to come work at his startup in an entry-level developer job at 3x my then current pay. I worked there for a couple years and when I was close to finishing college, another acquaintance hired me and doubled my pay. After that I was attached to a growing career and haven't looked back. But it all started with getting that tiny little bit of money together.

mcherm 9y ago
It is incredibly surprising. You aren't surprised because you have experienced this. But any economist would look at this and say something like this: > You claim that there are people where an investment of $400 would > quickly (within a couple of years) give them a salary increase in > the range of $20,000 to $50,000 per year. That is obviously untrue. > If it WERE true, then at lease ONE person in the country would have > spent $4,000 to seed a 10-person program which granted the $400 in > exchange for a promise to contribute $8,000 back in a couple of > years. A x20 replication factor would easily swamp administrative > costs and participants who refuse to pay afterward and the program > would still be growing exponentially. I think the source of the fallacy is that while there ARE people for whom $400 is a difficult-to-surmount barrier beyond which no other major impediments stand between them and middle-class success, they are an impossible-to-find minority in a sea of people who are willing to ASK for $400 and those for whom $400 is a major impediment, but further impediments would prevent them from succeeding. Alternately, we can look at the literally thousands of charities (including schools themselves) that offer merit-based and need-based scholarships, and conclude that the economist is partly right and the system DOES exist, but isn't meeting all of the need.

twblalock 9y ago

Why couldn't that student take out a student loan, like most students?