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Sounds like Australia's system [1]: "This funding is in the form of loans that are not normal debts. They are repaid over time via a supplementary tax, using a
by guga31bb 15y ago
Sounds like Australia's system [1]: "This funding is in the form of loans that are not normal debts. They are repaid over time via a supplementary tax, using a sliding scale based on taxable income. As a consequence, loan repayments are only made when the former student has income to support the repayments."
[1] http://en.wikipedia.org/wiki/Student_loan#Australia http://en.wikipedia.org/wiki/Student_loan#Australia
- pjscott 15y agoThere's a huge difference: the Australian system doesn't allow student loan investors (just the government?) to get more than the inflation-adjusted value of the interest-free loan. A percentage-of-earnings scheme, by not placing such a limit on the amount of money investors can make, would have two interesting effects: 1. Investors would have more incentive to help students succeed financially, since they get a cut of the profits. 2. Students who strike it rich would, in a competitive market, end up subsidizing everybody else. Think startups: the returns on VC's money come disproportionately from a few successes, and this lets them invest in a bunch of companies that probably won't be big hits, to get the few that will get big.