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>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 gro

>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?

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?