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In conventional student loans, one is generally required to
pay back the entire value, plus interest. I propose that, in
exchange for one's post-secondary education being paid
for, one submits to having a certain percentage (perhaps
3-5%) of their lifetime earnings garnished as repayment.
The
rate would be determined based on projected future
earnings vs. cost of schooling.
This eliminates the massive debt that often accompanies
the completion of higher schooling, and also means that
the payment rises with earning power.
Example: Law school can cost as much as $100K, and the
holder of a professional degree can expect to earn $4.4M
in their lifetime. At a 3% royalty, they would ultimately pay
$132K back, or $220K at 5%.
Old Harry's Game
http://en.wikipedia.../Old_Harry%27s_Game
Don't laugh.... [8th of 7, Sep 06 2010]
HECS and HELP
http://en.wikipedia...n_fees_in_Australia
Similar. [spidermother, Sep 02 2013]
[link]
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Here in the UK, people are considering a "graduate tax"
along similar lines. |
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Until a while back, I used to be able to express outraged
indignation at the fact that students in the US had to
actually *pay* to be educated. Now the same applies here
in the UK. |
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The sooner the human race exterminates itself, the
better. |
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.....aaaaand exhale.
Feeling a bit stressed [MB]? |
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[MB] You're an academic, I believe. Do you teach? One
consequence of students paying for their education is that
they treat their instructors like anyone else from whom they
might purchase a product or service: faculty are expected to
understand that the customer is always right. The
universities, mindful, like any other business, of customer
satisfaction, ask students to rate the faculty, and reward or
punish the latter accordingly. |
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Education as a commodity..... just like health care in the USA then? |
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Education and health care are commodities everywhere. The
interesting policy questions concern how to pay for them.
The advantage (to society) of paying for them with national
taxes is that the people paying don't get to direct the money
to themselves, their children, or their own social class.
Except that, in practice, they do, to some extent. |
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I think this might exacerbate the culture of lawyers (and other degreed professionals) charging exorbitant prices (to compensate for the repayments). |
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Education is always going to be expensive whether the tab is picked up directly by the tax payer, or indirectly through higher prices for professional services. Which route delivers the best outcomes at the lowest overall cost is an interesting question. |
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This is not a bad scheme. And for the first time I agree with [MB] on something, but not the part about us exterminating ourselves. I think space aliens should do it. |
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//Feeling a bit stressed [MB]?//
The meds are pooping out. |
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//[MB] You're an academic, I believe. Do you teach?//
Only graduates (and not for much longer; see above). |
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//Education and health care are commodities
everywhere.// I would argue that, if something is paid for
by the nation from taxes (as healthcare largely is here, as
roads are almost everywhere, and as education used to be
here), then it's not a commodity in the real sense of the
word. It's infrastructure. |
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Hang on hang on hang on, isn't this, y'know, income tax? |
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You mean like when tertiary education in the UK was "free", but then everyone paid higher taxes - including those who didn't go to University - and those who benefitted from University generally got better jobs and earned more which put them in a higher tax band so they paid more tax ? |
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Or like now, where students pay for their education retrospectively through a loans scheme ? |
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Which is actually fairer, because they (eventually) pay back what they spend ... |
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[8th] You're wrong not once, but twice. |
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Yes, graduates do get better jobs and earn more money.
As a result, they pay more taxes (both because it's a
percentage of a larger income, and because the
percentage is higher if they move into a higher tax
bracket). Based on average graduate salaries versus non-
graduates in the UK, I believe this factor alone more than
pays for their university education. |
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Also, whilst a graduate education benefits the graduate, it
also benefits others and the country as a whole, directly or
indirectly. |
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Finally, I strongly suspect that overall taxes are higher now
than they were, say, 30 years ago when education was a
right and not a "commodity". |
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Ah - sorry, that means you were wrong thrice, not twice
after all. Presumably the hive-mind doesn't face this
problem. |
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On the basis of your thinking, we should be selling *all*
education. After all, basic literacy allows the person to
earn more than someone who is illiterate. We should,
perhaps, reserve all education for those who can afford to
pay for it? This would suit me, since there would once
again be a large pool of uneducated cheap labour for me to
hire and exploit. |
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A retrospective graduate tax would, at least, eliminate
disciplines such as the liberal arts, languages, history,
maths and suchlike, and re-focus universities on good old
moneymakers like the sciences. |
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// The sooner the human race exterminates itself, the better. // |
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{MB], no need to make any effort. There are plenty of other species that will do it for you, for free. |
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//there’s absolutely no reason whatsoever to actually turn up to an educational establishment to gain knowledge of some topic or other// |
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This might be true for some purely theoretical disciplines, but most require a fair amount of hands-on experience. Even for theoretical subjects, some kind of feedback from a teacher is usually necessary for efficient learning (even if this is just provided online). |
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First up, I agree with everthing MB has said.
Second up, I agree with everything calum has said.
Third up [checks fingers to make sure that it is, indeed, three]. Yep, third up, I disagree almost, but not quite, entirely with Mr Tindale. Yes, you can learn stuff using the web, but most of your time will be spent (or should be spent) verifying your sources and you will also not be subject to peer review, which is a critical aspect of education I feel.
Fourth up, I took so long typing this that xaviergisz beat me to the punch. Damn!
Oh, and fifth up, I've said for years that rather than having grant funding or student loans, you should instead be eligible, on your 18th birthday, for a one-off payment from the government of, say, £20,000 (or a sum equivalent to the average salary) to spend on whatever the hell you like; be it education, a holiday, or a hotel room full of whores, booze and drugs. |
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I fundamentally object to the presumption that the movement of money is the correct way to control and regulate everything in society. |
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Releasing capitalist forces on education is a very bad idea. It creates unfairness, imbalances and favours the acquisition of those skills that are most directed towards money making, and away from pure knowledge and learning. |
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It dumbs down the arts in particular, and the results of that are a sterile and unhealthy society. |
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[Ian_Tindale] You've said elsewhere that you teach. Do you
regard yourself as a simple conduit through which
information flows, or is it, for you, a more active process? I'd
say teaching can be done well, and, when it is, it offers
something unavailable to the autodidact. |
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[xenzag] //It dumbs down the arts// Just being
countersuggestible, here, but: did it have that effect in
Renaissance Italy or the Dutch Golden Age? |
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I've changed my mind about this idea. If the taxes are levied against student debtors, this would be regressive taxation system as those without financial need would not take a loan, thus not paying higher taxes. |
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//Hang on hang on hang on, isn't this, y'know, income tax?// <Warning - rhetoric coming up> I suppose it is, except that (presumably) in this instance, the tax is pre-allocated towards reinvesting into the education establishment, rather than for funding wars, political expenses and whatever 'bad' government spending towards which someone might have negative emotional responses. |
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If that's the case, is it such a bad thing? Perhaps Income Tax should be split out into a whole host of little taxes that are more tailored to the individual (some of this already happens). So anyone who benefits from eduaction has a proportion of their income taxed to repay the benefit they established from government-funded education, anyone who uses the roads pays a proportion of their income to maintain their upkeep, anyone who watches government funded TV might be expected to pay a premium on their income based on the benefit they gain from TV, etc etc etc. |
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Since government *has* to pay for certain aspects of civil life, isn't it fairer to expect people to repay based on the benefits they gain? |
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Coming full circle, it would cost billions to administer a tax regime such as this - precisely calculating what a person 'owes' society at any given minute - the social equivalent of everyone totalling their bills individually at the end of a restaurant meal. |
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A progressive income tax is probably the fairest, simplest and best way to achieve this aim - assuming of course, the government spends the revenues gained in reasonable proportions. |
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That's one whacking great assumption right there, [zt]. |
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//funding wars...and whatever 'bad' government spending...//
There's a lot to be said for wars. By draining the treasury, they reduce the power of government (normally by handing it over to rich bankers and fat businessmen which is not so good, admittedly), they drive technical innovation and individual initiative and, from a proletarian viewpoint, they kill off lots of my competitors in the labour market and enable me to demand higher wages for my toil...assuming I survive obviously. |
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// expect people to repay based on the benefits they gain? // |
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Perhaps by, for example, pre-mortem organ donation ? |
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// from a proletarian viewpoint, they kill off lots of my competitors in the labour market and enable me to demand higher wages for my toil// |
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Plagues do this job more cheaply. See Disraeli's "Sybil" on this point. |
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Re. market forces in education: |
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In the information market, the customer is not always right. If the customer were always right, then he wouldn't need any information. |
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This means that, whatever one thinks about the Efficient Markets Hypothesis in general, education is likely to be an exception to it. So, for the same reason, is media. So, actually, are large parts of the health-care industry. So are most things that matter, in fact. |
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//In the information market, the customer is not always
right. If the customer were always right, then he wouldn't
need any information. // |
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Marked for memorable quote. |
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Memorable, yes, but: many purchasers of education don't
consider themselves to be buying information: they see the
product as future earning capacity. No information
asymmetry, no market failure. Such people wouldn't pay a
red cent to be introduced to Disraeli's novels, let alone for
anyone else to be introduced to them. You can only get
swine to pay for pearls by taxing them; they won't do it
voluntarily. |
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I've heard that the flying ones do. |
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// many purchasers of education don't consider themselves to be buying information: they see the product as future earning capacity// |
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Yes, but there's a third party involved; a future employer, who would in many cases prefer that the diploma reliably indicated that some information had been purchased. |
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In the case of a degree from, say, Brighton Business School or the Western Australian School of Mines, that future employer is the ultimate purchaser of the information, the educator owns the brand and the student is just a dodgy retailer. |
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In the case of a History degree from Harvard, the economic dynamics are probably a bit different, both for the student and the future employer. |
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My two cents on this one probably are not worth the tax on them but... |
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Education, and especially 'public' education systems need to change radically. I understand that it is all an averages game where a majority of the kids can recieve the majority of a good education but that thinking is completely flawed, at least from the perspective of someone flushed out of the public system because I seem unable to learn well by rote.
For me everything needs a visual refference or when I try to retrieve information from my memory it's just like staring into fog...there are no connections to anything I can access. I can do nothing about this, it's the way I was born, yet there are things I can do with this ignorant mellon that make me wonder if I didn't just get completely and utterly shafted by society because I am unable to conform to that majority. |
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as for;
//We should, perhaps, reserve all education for those who can afford to pay for it? This would suit me, since there would once again be a large pool of uneducated cheap labour for me to hire and exploit.// |
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...and your grouting will be completed later this afternoon. |
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By a truly bizarre coincidence, my grouting will indeed be
finished this afternoon (well, this evening). Sadly, however,
it will be finished by my own good hands. |
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This is actually a pretty decent idea. |
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It does of course focus on student learning as a potential source of future income, and as such, certain sectors such as the Liberal Arts may suffer. |
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However, it does a number of positive things as well. |
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By allowing individuals to apply for loans based on future earning potential, it helps to ensure that individuals who will increase their earning potential by going to school are the majority of the students. This reduces the number of career students, and perpetual frat pledges, who would otherwise spend most of their time inflating the cost of beer, drugs, and hookers while impoverishing their relatives. |
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By placing investors in charge of delivering loans based on future performance, the percentage of individuals who graduate school and then realize there are no jobs available for them will likely decrease, because investors work quite hard to ensure that there are few surpluses or shortages in the supply-demand chain for their products. |
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By putting university funding at the mercy of investors, universities will have to be proactive in their search for degrees that maximize earning potential. This ought to revolutionize education in a way that inherentily benefits students. |
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The majority of degrees would likely turn out to be either of the tried-and-true paycheck-earning type, or the cutting-edge gamble type. This ought to provide society as a whole with a reliable supply of infrastructure-supporting employees, and a spicy mix of innovators. |
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[pertinax] //Yes, but there's a third party involved; a
future employer, who would in many cases prefer that the
diploma reliably indicated that some information had been
purchased.// |
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Certainly the employer relies on the diploma to indicate
something, but is it that some information was purchased?
The diploma may only indicate certain characteristics of
the prospective employee which are innate, not imparted
by education, but of which the employer lacks other
indicators. e.g. that the employee is smart enough to be
accepted at University X, and diligent enough to pass his
courses and graduate. |
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If that seems too crude for you, consider this: how else,
without a university, would you distinguish the sort of
person who switches from the school of engineering to the
business school from the real McCoy who graduates with an
engineering degree? |
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Or consider the calculus and physics requirements for
admission to an American medical school: that
information isn't actually used in medical school, let alone
a physician's subsequent career, but the courses serve to
filter the pool of potential applicants. The student pays
the university to testify to the student's intelligence and
capacity for hard studying -- not to teach him/her calculus
or physics. |
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The diploma tells the employer something about the
applicant, but what? Not necessarily that information was
purchased. |
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I can't help thinking (and this may be a purely personal
opinion) that, if they hadn't already done so, then it would
have been about to have become all the more so. In which
case, inter alia, it would seem that it might not have been
so, were it not for the inevitable recursions. |
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A customer who is always right doesn't need
an education, surely? |
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Academic freedom and business imperative
do not mix - even if they coexist well
sometimes. |
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You know the Drake equation? That one that speculatively
calculates the number of intelligent civilisations in the
galaxy? |
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I think the problem is that it doesn't include P(c ->s), the
probability that a civilisation, voluntarily and of its own
accord, turns to shit. |
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I would have thought that it is covered by f(i) (the percentage of planets that develop intelligent life). Based on current knowledge, I would estimate this percentage at zero. |
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[bigsleep] interesting thought about what would have happened had the Greeks had thier own industrial revolution way back in 400BC. Not so much steampunk, as togapunk. |
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Oh God, i knew i should've looked at this idea earlier. As it is, i haven't time
to read the whole thing right now which might mean i'm about to make
myself look stupid. |
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Anyway, education benefits the whole of society. Just because our own
family haven't partaken of schools doesn't mean i don't recognise that the
tax i pay to keep them going isn't to my benefit as well as people who
become engineers, add up change properly in shops, do forensic science
and so on. The educational "consumer" isn't the guy with the doctorate. |
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The customer is seriously not always right or someone with a sore throat
would buy a lozenge which would magically cure their undiagnosed
leukaemia. |
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Also, this is just income tax. |
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On the subject of humanities, i just want to mention the serials crisis. I
mean, it's not like that doesn't lead to vast sums of money being wasted at
all, is it? |
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The points of doing education at a bricks and mortar institution are that it
enables young people to learn to function in society besides their academic
abilities to an extent, and gets them contacts which they can later use. |
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I think Facebook probably gives you fair weather friends who pretend they don't know you when you want a job unless you already know them in meatspace. No offence to anyone here meant, by the way. |
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//No information asymmetry, no market failure.// |
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//Education and health care are commodities everywhere.// |
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These two mistakes may be related. |
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The second implies not only that education is something with a financial price (true) but also that one education differs from another only quantitatively, not qualitatively. That's what "commodity" means, in business terms. So, for example, wheat is a commodity because people don't buy particular brands of wheat. They just buy wheat which, provided that it meets certain basic standards, is interchangeable with other wheat. Clearly, education is not like this; the education market has brands (and many other kinds of differentiation), and commodity markets have not. |
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The first assumes, I think, that a "market failure" occurs if and only if one party to a transaction gets something with which they are likely to be disappointed, given what they paid. However, the inappropriateness of market forces to education goes far beyond problems with marginal benefits to the parties in individual transactions. I remember once reading a whiny letter to a magazine from a graduate in, as it might be, politics or philosophy. Before she began her degree, she wrote, she had clear views on her subject, which she was able to articulate with confidence. The effect of the degree course, she complained, was to fill her with doubts and diminish her self-confidence. Now, in market terms, she was clearly an unsatisfied customer. In societal terms, however, I suggest that her higher education was a success; it led to one less fool tramping around with a blindfold and a megaphone. Now, I don't know how you could put a financial value on that outcome, but I don't think it could have been achieved by any market mechanism. |
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Hmmm, good point [pertinax] How about if, instead of (or as-well as) having students pay for their own education, non-students paid extra for the negative externalities of their lack of education? A sort of Kyoto Protocol for idiocy? You might charge a flat rate of 0.001 pence per misplaced apostrophe, and have a governmental ministry responsible for collecting spellings-and-grammar-based revenue (this might also provide the GCHQ listening stations with a revenue-generating function as they scan people's texts, emails and web-postings) - unfounded opinions and incorrect sums might be charged at slightly higher rate. At the end of the year, everyone would be presented with a form showing what they owe overall, and they'd be be expected to pay, or at least lodge an appeal, by the end of the tax year. |
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The revenues generated could be ploughed back into the education system, and there would now be a direct, simple answer to the question "But what's the point of us learning algebra, we'll never use it in our day-to-day lives?" - The answer, "To minimise your future tax-liabilities, children." |
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If people were individually called to account for their levels of apparent education, I bet in 5 years, you'd have one of the best educated nations on the planet! |
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//Inappropriateness of market forces to education goes far
beyond problems with marginal benefits to the parties in
individual transactions.// Oh, agreed, agreed. Or at least
it seems like a big challenge to show that maximizing
those marginal benefits will have the broader benefits you
allude to. |
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But you were (I thought) arguing that, in the case of
education, the market couldn't even optimize marginal
benefits to the parties in the transaction, due to
information asymmetry, and I attempted to show that the
existence of such an asymmetry depended on a
questionable assumption about what the customer really
thought they were buying. |
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Regarding the definition of "commodity,"
[MaxwellBuchannan] and I weren't using the word in the
business sense of something fungible, but in the lay sense
of something interconvertable with something fungible,
i.e. money. (The product, in other words, of
"commodification.") He was making the normative
assertion that education isn't a commodity, and I replied,
over-flippantly, with the descriptive assertion that it is. |
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That was based on the observation that money can be
converted into education. That proposition seems to me
incontrovertible, and you seem to agree with it.
Converting education back into money is trickier, but the
damage is already done: once the price tag is attached,
it's hard to spend money on something without asking
what it's worth. |
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//one less fool// She was converted from "passionate
intensity" to "lack[ing] all conviction" Me too: that's why
I'm prone to argue against my own position. I'm told (I
havent' read the Inferno) that there's a circle in Hell for
people like me. |
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Rather than trying to decide on the economics of education,
who gets the financial benefit, and all that stuff....how
about the concept that education should be free because
that's just the right thing to do? |
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That requires not factoring in the existence of utter bastards. |
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[MaxwellBuchanan] Perhaps it isn't obvious, but, in fact, I
agree with you. |
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// there's a circle in Hell for people like me // |
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There certainly is. You should read The Inferno forthwith; and then you should listen to Old Harry's Game, <link>. And then you should be, a la Arthur Dent, Very Afraid, |
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// not factoring in the existence of utter bastards. // |
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There's a HalfBaker who's more than grasped the essentials of Algebra .. |
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There are government departments for all kinds of crap.
Why isn't there one for Doing The Right Thing? It would be
another group of advisors for the government to overrule. |
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// Why isn't there one for Doing The Right Thing? // |
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There is, but it's a Black Project. |
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We could tell you more, but then we'd have to kill you. |
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Actually, would it be OK if we just killed you anyway ? We kind of enjoy that bit of the job. |
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Back in the chamber, 8th. We're talking. |
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So... we all agree, by and large. Hmm... Isn't there a troll here we could lynch? No? Probably just as well. Rage is habit-forming, and so forth. |
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//Rather than trying to decide on the economics of education// If you do the economics properly, it should address this point - it's usually easy to state what the right thing is, the problem is in codifying that and implementing it on a wide scale - and that's where the economics* comes in. |
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* where "economics" here refers to the study of human incentives - since there's no way to quantify a human incentive, we apply the rather crude method of monetary costs/benefits, the same way scientists quantify forces and measurements using the (at a fundamental level) crude system of units and values curently used. In the same way that gas-laws apply at a macro level despite all of the actual goings on being sub-atomic and indeterminate, the same thing applies with economics and people. |
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I like this. Having accumulated debt to study and not even had a proper teacher for half the lessons, I think a bit of financial incentive for the school to teach properly is a good idea. |
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//On the basis of your thinking, we should be selling *all* education. After all, basic literacy allows the person to earn more than someone who is illiterate. We should, perhaps, reserve all education for those who can afford to pay for it? // |
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Education would not be reserved for those who could pay for it. It would be reserved for those who could convince a school they were worth educating. If you are poor but smart and hard working, you could still get a law degree and you would be insulated from the financial risk that currently accompanies such an endeavor. |
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That's quite a good point, Bad Jim. Actually very quite a
good point. |
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But, fundamentally, I still hold to the ideal that a civilised
society educates all of its citizens to the limit of their
ability, if they so wish, as a basic right. |
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In a couple of hundred years, people will look back at us and
be disgusted that we were so money-grubbing and petty as
to make people pay for things. |
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Actually nevermind. Maybe I should just go away and invent
a Killer Plague or a Death Ray or a Black Hole or something.
I'm in that kind of a mood. |
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I just checked in the shed. I forgot I had a Death Ray. Funny
that, isn't it? You spend years as a child, madly involved in
some all-important project, then forget about it, only to re-
discover it in later life. |
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Batteries are flat, of course, and seem to have leaked. But a
bit of a clean-up and we're in business. If everyone could
just get their affairs in order and turn off the gas, I'll pop to
the garage and get some AA's. Back in a mo. |
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Australia has almost exactly this system. The main difference is that the proportion of income that is paid increases as income increases. For example, someone earning $30,000 per year pays nothing, while someone earning $50,000 per year pays 5% of income. [link] |
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