8 ms·

Let's scale this up huge, let everyone take part, and have all of society invest in education and reap the rewards. We can call it "public education" and even c

Let's scale this up huge, let everyone take part, and have all of society invest in education and reap the rewards. We can call it "public education" and even capture the public externalities of having a well-educated population!

harryh 8y ago
ISAs != tax funded education because the former closely aligns the incentives of the educator with the educated while the latter does not.
- will_brown 8y ago
  >the former closely aligns the incentives of the educator with the educated Do you think the school cares if you pay them using a federal student loan vs a group of private investors making payments on your behalf? How does one align the incentives of the school with students any more than the other? The only alignment of interests the school has with the students is when the student has a rich parent who could be a donor or the student is a super athlete that can measurably impact the school revenue as an unpaid student athlete.
  - harryh 8y ago
    OP wasn't talking about funding the school via federal student loans, but instead via taxes which is why the inequality in my comment said "tax funded" and not "loan funded."
    - will_brown 8y ago
      Fine how does tax funded vs loan funded vs private capital funded education align the interests of the school with the students? The students interest is getting an education, converting that education into employment, and not being indebted. The schools interest is revenue. The student would be best off with a free tax funded education and no debt, the school is best off with guaranteed federal loans allowing them to charge imaginary tuition rates no one can normally afford but for guaranteed student loans. Where is the alignment of interests come from with private capital in exchange for future earnings? Students are left indebted (maybe not in debt but indebted) and schools face the reality the private market isn’t willing to pay runaway tuition costs like guaranteed federal loans because private market knows it’s a bad investment (as evidenced by the current amount of outstanding student loans and default rates, nearly 1million defaults a year). Next thing we know the private investors will begin negotiating tuitions on behalf their investments and leaving non- capital backed students footing the bill for the difference (kind of like our messed up healthcare system).
      - harryh 8y ago
        If a student with an ISA doesn't get a good job after graduation, the school gets nothing (or not much). If the student does get a good job, the school gets paid more. Thus the school is highly incentivized to make sure that their graduating students are highly employable. This is very different from the other systems where the school gets paid no matter what happens after graduation.
        will_brown 8y ago
        >If a student with an ISA doesn't get a good job after graduation, the school gets nothing (or not much). The school isn’t the one making these deals (at least from the example in the article), private investors are entering into these agreements with students. If the student doesn’t get a job the private investors don’t get paid, whereas the school has already been paid.
        harryh 8y ago
        The financiers are working in close concert with the university. It's basically a partnership.
        tracker1 8y ago
        If the school doesn't perform, the investors won't keep investing in students going to said school and enrollment drops. It's economics working. It would probably also carry over into fields of study, and length of study with escape hatches.
    - SkyBelow 8y ago
      The investors will only offer the option when they think the combination of the student, the school, and the specific degree program will show a positive return on investment. This means that a school that does not offer the student an education that will enable them to make more money will not be considered as an option by the private investors. In theory a government agency could do the same, but I think there is enough evidence that investors do a better job of investing their own money than government employees do for investing tax payer money.
      - jfk13 8y ago
        Is "make more money" the best criterion we can find for determining what educational paths should be encouraged and supported? It's bad enough that students are likely to be naturally drawn towards certain career choices - such as advertising technology - because of the generous pay to be found in that sector, rather than because they see an opportunity to make the world a better place. Let's not give educational institutions an added financial incentive to promote the most lucrative courses and careers rather than the most beneficial ones.
        SkyBelow 8y ago
        >Is "make more money" the best criterion we can find for determining what educational paths should be encouraged and supported? First, that is quite a different question than the one I was answering. When someone is asked what is the best way to eat an elephant and tries to give an answer, mentioning that people shouldn't eat elephants is a comment better directed at the person asking the original question and not the one answering. Second, no, but we also have scholarships and such which reduce cost for those deemed having potential that isn't restricted just to making money. It would be unwise to overlook the increase in earning potential being the reason so many college students justify taking on their degree, and it would also be unwise to insist that the college experience is the path for those who want a general purpose education without a specific purpose. Third, that figuring out how to trick more people into buying something is a more lucrative career than something that advances human society is an indictment of humanity at large. Is colleges promoting beneficial courses (based on what ever definition you go with) over lucrative ones really benefiting society when it leaves the student without the ability to earn money in a society that runs on money?
zrail 8y ago
I agree with you. ISA proponents make two arguments that sort of resonate with me, though. First, incentive alignment is closer with a private structure. This is weak to me because there’s no reason why incentives can’t be aligned in a similar way with, say, an additional tax on students that looks similar to an ISA (big standard deduction, time limited, with a total cap on return). Second, and more reasonable to me, is that the political climate makes public universal education impossible at the moment so why not pioneer in the private space? I would love to see society invest in citizens, and in fact I would go farther and fully federalize the preK-12 system and ban charters. Such things are just not realistic with a government that can’t even pass a simple budget without fireworks.
- rukittenme 8y ago
  > and ban charters. Why? What's the difference between publicly funded versus publicly funded and operated?
  - zrail 8y ago
    The current incarnation of charter schools are a problem because they can choose who they want to admit with very loose regulations. Anyone who looks like they might be expensive or against whatever their corporate beliefs happen to be are not admitted. Public schools have to take everyone, which means they get the most expensive students (read: special needs and disabled students) while being stripped of revenue that they depend on to help those students. Federalizing K-12 in the US is a pretty radical proposal but I think it's necessary if we ever want to get out of the inequality quagmire we're in now. Leveling the playing field would mean that no matter where you happen live your kids have access to well funded high quality primary education.
    - nostrademons 8y ago
      Which state? In Massachusetts all charter school admission is by lottery, with preference given to siblings of existing students and students who reside in the district the charter school is located in.
jlawson 8y ago
Who decides which kids aren't worth the investment? We can't just indiscriminately invest in everyone - we're going to end up throwing a huge amount of money away on kids that don't have the capacity to benefit from such education, and wasting the kids' time too. Not to mention the credential inflation, and the kids' own debt burden if they're tricked into investing their own scarce funds into education that won't pay off. I guess I'd support this if there was some strict mechanism to avoid such malinvestments - but I'm not sure how feasible that is politically given the equality dogma prevalent in our culture. At the end of the day, having the government control this creates the same Soviet-style problems as having the government control investment in cars, bread, or other consumer goods. Government just doesn't have anywhere near the accuracy in allocation or price discovery as free market does.
stale2002 8y ago
Or how about we give people the voluntary choice to participate, or not participate, in these efforts? That way those that prefer more expensive forms of education, can be free to do that and pay for it, and those who don't, don't have to do so.
- cowpig 8y ago
  An educated population is a public good. Particularly in a democracy.
  - gristig 8y ago
    Not everyone that is taught at college causes an educated population. Underwater basket weaving - like course cause more harm than good.
  - Matticus_Rex 8y ago
    Okay, even if we accept the basic logic there uncritically, it's not infinitely good. For example, the 24th year of schooling is not a public good, because there's no plausible argument that the social benefits it provides are greater than the cost. What about the 20th? The 16th? At what point does it cease to be a public good? (Hint, we have some attempts to answer this question, and it suggests that college is a private good with a value that is mostly in signaling rather than skill acquisition, and casts some doubt on whether high school really meets the criteria)
SkyBelow 8y ago
And watch the value of the college degree follow the trend of a high school diploma! If we offered free college, how long before we start dropping the standards to earn a degree (for the same reasons we did so with high school diplomas) and have students waste even more of their lives in extremely sub par education environments?
- rublev 8y ago
  Why do you talk about this like it's a theory? Many parts of the world have free education. The value of a diploma is already largely meaningless unless you go to an ivy league school.
- encoderer 8y ago
  I have to assume this is sarcasm but if not: you’re about 30 years late.
- leggomylibro 8y ago
  Who cares if we drop the standards to earn a degree? In a theoretical world where high-quality public education is freely available, who cares about earning a degree at all? The most successful and competent people who I have ever worked with don't share much in the way of education, but they all feel some sort of passion and drive for what they do. They see potential in their work and think about it all the time, so they are good at it and they have a lot of useful insights. "Education" shouldn't be a simple signal that you have enough diligence and financial werewithal to consistently show up in the same place over the course of 4 years. It should be a lifelong process of both asking and informing people what they are capable of. Personally, I think the all-or-nothing approach of primary school->secondary school->career->grave is a huge waste of people. I think we just need to figure out how to provide adults with the time and safety to uproot their lives for a couple of years at a time.
  - pcstl 8y ago
    People will care about earning a degree because the rat race never ends. When you devalue university degrees, people will start earning degrees just because they can and because clueless employers grasp at any straw they can use to differentiate between applicants. That's how it becomes impossible to get a half-decent job without a college degree.
sneak 8y ago
> let everyone take part Surely you mean “force everyone to take part”. > and have all of society invest in education I would prefer you not “have” me or other people do things against my or their will.
- cowpig 8y ago
  Interesting... I would prefer you not use the roads, schools, courts, plumbing, utilities, waste management, firefighting, ... that our taxes pay for. Unfortunately (fortunately?) I'm forced to tolerate you against my will. I guess we all have to make sacrifices
  - sneak 8y ago
    I pay taxes as well, because violent people provide me with no other option to avoid them inflicting violence upon me. Are you saying that violence used to force me to do things I don’t consent to is the same as you having to “tolerate” me getting to use the things my money paid for, the same as anyone else? I’m not sure I follow your reasoning.
rudolph9 8y ago
This is such revolutionary thinking!
throwawayjava 8y ago
Income sharing applied to four year degrees is almost always more expensive than federally subsidized loans (which taxpayers still make money on...)
- fatnoah 8y ago
  Plugging in numbers for my own degree (CS) and loan amount shows I would have paid $14k in "interest" for my $35k loans over 88 months, which is roughly double what I actually paid over 120 months.

harryh 8y ago

ISAs != tax funded education because the former closely aligns the incentives of the educator with the educated while the latter does not.

will_brown 8y ago
>the former closely aligns the incentives of the educator with the educated Do you think the school cares if you pay them using a federal student loan vs a group of private investors making payments on your behalf? How does one align the incentives of the school with students any more than the other? The only alignment of interests the school has with the students is when the student has a rich parent who could be a donor or the student is a super athlete that can measurably impact the school revenue as an unpaid student athlete.
- harryh 8y ago
  OP wasn't talking about funding the school via federal student loans, but instead via taxes which is why the inequality in my comment said "tax funded" and not "loan funded."
  - will_brown 8y ago
    Fine how does tax funded vs loan funded vs private capital funded education align the interests of the school with the students? The students interest is getting an education, converting that education into employment, and not being indebted. The schools interest is revenue. The student would be best off with a free tax funded education and no debt, the school is best off with guaranteed federal loans allowing them to charge imaginary tuition rates no one can normally afford but for guaranteed student loans. Where is the alignment of interests come from with private capital in exchange for future earnings? Students are left indebted (maybe not in debt but indebted) and schools face the reality the private market isn’t willing to pay runaway tuition costs like guaranteed federal loans because private market knows it’s a bad investment (as evidenced by the current amount of outstanding student loans and default rates, nearly 1million defaults a year). Next thing we know the private investors will begin negotiating tuitions on behalf their investments and leaving non- capital backed students footing the bill for the difference (kind of like our messed up healthcare system).
    - harryh 8y ago
      If a student with an ISA doesn't get a good job after graduation, the school gets nothing (or not much). If the student does get a good job, the school gets paid more. Thus the school is highly incentivized to make sure that their graduating students are highly employable. This is very different from the other systems where the school gets paid no matter what happens after graduation.
      - will_brown 8y ago
        >If a student with an ISA doesn't get a good job after graduation, the school gets nothing (or not much). The school isn’t the one making these deals (at least from the example in the article), private investors are entering into these agreements with students. If the student doesn’t get a job the private investors don’t get paid, whereas the school has already been paid.
        harryh 8y ago
        The financiers are working in close concert with the university. It's basically a partnership.
        tracker1 8y ago
        If the school doesn't perform, the investors won't keep investing in students going to said school and enrollment drops. It's economics working. It would probably also carry over into fields of study, and length of study with escape hatches.
  - SkyBelow 8y ago
    The investors will only offer the option when they think the combination of the student, the school, and the specific degree program will show a positive return on investment. This means that a school that does not offer the student an education that will enable them to make more money will not be considered as an option by the private investors. In theory a government agency could do the same, but I think there is enough evidence that investors do a better job of investing their own money than government employees do for investing tax payer money.
    - jfk13 8y ago
      Is "make more money" the best criterion we can find for determining what educational paths should be encouraged and supported? It's bad enough that students are likely to be naturally drawn towards certain career choices - such as advertising technology - because of the generous pay to be found in that sector, rather than because they see an opportunity to make the world a better place. Let's not give educational institutions an added financial incentive to promote the most lucrative courses and careers rather than the most beneficial ones.
      - SkyBelow 8y ago
        >Is "make more money" the best criterion we can find for determining what educational paths should be encouraged and supported? First, that is quite a different question than the one I was answering. When someone is asked what is the best way to eat an elephant and tries to give an answer, mentioning that people shouldn't eat elephants is a comment better directed at the person asking the original question and not the one answering. Second, no, but we also have scholarships and such which reduce cost for those deemed having potential that isn't restricted just to making money. It would be unwise to overlook the increase in earning potential being the reason so many college students justify taking on their degree, and it would also be unwise to insist that the college experience is the path for those who want a general purpose education without a specific purpose. Third, that figuring out how to trick more people into buying something is a more lucrative career than something that advances human society is an indictment of humanity at large. Is colleges promoting beneficial courses (based on what ever definition you go with) over lucrative ones really benefiting society when it leaves the student without the ability to earn money in a society that runs on money?

zrail 8y ago

I agree with you. ISA proponents make two arguments that sort of resonate with me, though. First, incentive alignment is closer with a private structure. This is weak to me because there’s no reason why incentives can’t be aligned in a similar way with, say, an additional tax on students that looks similar to an ISA (big standard deduction, time limited, with a total cap on return). Second, and more reasonable to me, is that the political climate makes public universal education impossible at the moment so why not pioneer in the private space? I would love to see society invest in citizens, and in fact I would go farther and fully federalize the preK-12 system and ban charters. Such things are just not realistic with a government that can’t even pass a simple budget without fireworks.

rukittenme 8y ago
> and ban charters. Why? What's the difference between publicly funded versus publicly funded and operated?
- zrail 8y ago
  The current incarnation of charter schools are a problem because they can choose who they want to admit with very loose regulations. Anyone who looks like they might be expensive or against whatever their corporate beliefs happen to be are not admitted. Public schools have to take everyone, which means they get the most expensive students (read: special needs and disabled students) while being stripped of revenue that they depend on to help those students. Federalizing K-12 in the US is a pretty radical proposal but I think it's necessary if we ever want to get out of the inequality quagmire we're in now. Leveling the playing field would mean that no matter where you happen live your kids have access to well funded high quality primary education.
  - nostrademons 8y ago
    Which state? In Massachusetts all charter school admission is by lottery, with preference given to siblings of existing students and students who reside in the district the charter school is located in.

jlawson 8y ago

Who decides which kids aren't worth the investment? We can't just indiscriminately invest in everyone - we're going to end up throwing a huge amount of money away on kids that don't have the capacity to benefit from such education, and wasting the kids' time too. Not to mention the credential inflation, and the kids' own debt burden if they're tricked into investing their own scarce funds into education that won't pay off. I guess I'd support this if there was some strict mechanism to avoid such malinvestments - but I'm not sure how feasible that is politically given the equality dogma prevalent in our culture. At the end of the day, having the government control this creates the same Soviet-style problems as having the government control investment in cars, bread, or other consumer goods. Government just doesn't have anywhere near the accuracy in allocation or price discovery as free market does.

stale2002 8y ago

Or how about we give people the voluntary choice to participate, or not participate, in these efforts? That way those that prefer more expensive forms of education, can be free to do that and pay for it, and those who don't, don't have to do so.

cowpig 8y ago
An educated population is a public good. Particularly in a democracy.
- gristig 8y ago
  Not everyone that is taught at college causes an educated population. Underwater basket weaving - like course cause more harm than good.
- Matticus_Rex 8y ago
  Okay, even if we accept the basic logic there uncritically, it's not infinitely good. For example, the 24th year of schooling is not a public good, because there's no plausible argument that the social benefits it provides are greater than the cost. What about the 20th? The 16th? At what point does it cease to be a public good? (Hint, we have some attempts to answer this question, and it suggests that college is a private good with a value that is mostly in signaling rather than skill acquisition, and casts some doubt on whether high school really meets the criteria)

SkyBelow 8y ago

And watch the value of the college degree follow the trend of a high school diploma! If we offered free college, how long before we start dropping the standards to earn a degree (for the same reasons we did so with high school diplomas) and have students waste even more of their lives in extremely sub par education environments?

rublev 8y ago
Why do you talk about this like it's a theory? Many parts of the world have free education. The value of a diploma is already largely meaningless unless you go to an ivy league school.
encoderer 8y ago
I have to assume this is sarcasm but if not: you’re about 30 years late.
leggomylibro 8y ago
Who cares if we drop the standards to earn a degree? In a theoretical world where high-quality public education is freely available, who cares about earning a degree at all? The most successful and competent people who I have ever worked with don't share much in the way of education, but they all feel some sort of passion and drive for what they do. They see potential in their work and think about it all the time, so they are good at it and they have a lot of useful insights. "Education" shouldn't be a simple signal that you have enough diligence and financial werewithal to consistently show up in the same place over the course of 4 years. It should be a lifelong process of both asking and informing people what they are capable of. Personally, I think the all-or-nothing approach of primary school->secondary school->career->grave is a huge waste of people. I think we just need to figure out how to provide adults with the time and safety to uproot their lives for a couple of years at a time.
- pcstl 8y ago
  People will care about earning a degree because the rat race never ends. When you devalue university degrees, people will start earning degrees just because they can and because clueless employers grasp at any straw they can use to differentiate between applicants. That's how it becomes impossible to get a half-decent job without a college degree.

sneak 8y ago

> let everyone take part Surely you mean “force everyone to take part”. > and have all of society invest in education I would prefer you not “have” me or other people do things against my or their will.

cowpig 8y ago
Interesting... I would prefer you not use the roads, schools, courts, plumbing, utilities, waste management, firefighting, ... that our taxes pay for. Unfortunately (fortunately?) I'm forced to tolerate you against my will. I guess we all have to make sacrifices
- sneak 8y ago
  I pay taxes as well, because violent people provide me with no other option to avoid them inflicting violence upon me. Are you saying that violence used to force me to do things I don’t consent to is the same as you having to “tolerate” me getting to use the things my money paid for, the same as anyone else? I’m not sure I follow your reasoning.

rudolph9 8y ago

This is such revolutionary thinking!

throwawayjava 8y ago

Income sharing applied to four year degrees is almost always more expensive than federally subsidized loans (which taxpayers still make money on...)

fatnoah 8y ago
Plugging in numbers for my own degree (CS) and loan amount shows I would have paid $14k in "interest" for my $35k loans over 88 months, which is roughly double what I actually paid over 120 months.