New way to finance college

cawacko said:
Where did you go Althea? You're proclaiming knowledge of this subject but all you've come up with is its "profit takers" who are the reason for the rise in college tuition.
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The issue is funding. Try to keep up with your own thread.
 
cawacko said:
Anyone have much student debt in their days? What would you think of this option if it was available to you back when?




This controversial way to finance college may be getting more popular

These students pay for college by selling a percentage of their future income to a backer



It soon may get easier for students to finance college by selling a share in their future selves.

Purdue University is partnering with Vemo Education, a technology firm, in hopes of spreading an alternative form of college financing pioneered at Purdue last year. The product, known as an income-share agreement or ISA, allows students to pay for college by selling a percentage of their future income to a backer, instead of paying out right or taking on debt. Typically, students who go into more lucrative fields pay a smaller percentage of their income during repayment, while students who go into less lucrative fields pay a larger share.

The West Lafayette, Ind.-based public college launched the first college-backed ISA for its students last year to much fanfare and immediately began hearing from other schools interested in offering ISAs of their own, according to the school’s president, Mitch Daniels. The partnership announced Thursday is an effort to help these schools get their own programs off the ground by allowing them to use Purdue’s program as a model and Vemo’s technology to more easily provide students with ISAs, without having to start from scratch.

It’s also a sign of a growing interest and market around this product amid concern about the consequences of having millions of borrowers saddled with student loan debt. “Clearly there’s a need for alternatives,” said Daniels, a former Republican governor of Indiana. “We’ve never suggested this is a complete one, but I believe it can only be helpful if it spreads and grows.”


ISAs have been growing in popularity, at least among conservative circles, for the past few years. The benefit of this type of arrangement, supporters say, is that it better protects students from bad luck. One major downside is that because of the way ISAs are structured, students might wind up paying more than if they took on a loan. The typical term for an ISA is 10 years, so a graduate who pursues a lucrative field of study could wind up paying more because the amount of income they pay out over the 10 years could exceed the amount they needed to pay for school. What’s more, the optics of a young person selling stock in themselves are not great.

Students and parents are often initially skeptical of ISAs when they’re first explained, but once asked to compare them to an equivalent loan, they typically prefer ISAs, according to Jason Delisle, a resident fellow at the American Enterprise Institute, a conservative think tank, who has surveyed families on the topic. Though the current ISA market is still pretty small, Delisle said his data indicates that “there’s potential for them to catch on.”


The Purdue-Vemo partnership can help speed up that growth. By providing both the technology and trusted advice from an academic peer who has experience with the product they can make colleges more comfortable with offering an ISA, said Tonio DeSorrento, Vemo’s chief executive.

Don’t miss: The battle for student-debt forgiveness by young farmers goes local

But one major obstacle preventing ISAs from becoming more widespread is the regulatory environment surrounding them, Delisle said. Right now, it’s unclear how they’ll be monitored and what kind of consumer protections they’ll be required to abide by, he said. Though there are signs that could soon be changing. Republican lawmakers have floated bills that would regulate ISAs and a more conservative, free-market focused administration may be more open to this kind of product.

“I see no reason to doubt that the new Department of Education will be friendlier to innovations like this,” Daniels said.

Sheila Bair, the president of Washington College, a small liberal arts college in Chestertown, Maryland, said she’s “hopeful” the new administration will be more open to using ISAs to address our student debt woes. Though the government currently offers students the option to make loan payments that are tied to their income, opting for one of these plans stretches out the term and allows the interest to build. These programs also offer debt forgiveness after a certain number of years of repayment, but that discharge typically comes with a tax bill.

“It’s all been very difficult for students I think,” said Bair, the former chairwoman of the Federal Deposit Insurance Corporation. At her school officials are looking into the possibility of offering ISAs to their students, Bair said. They’ve built some models and talked to donors about it. “We’re working on it, were not ready to launch yet, but I would love to,” she said.

Even if ISAs become more widespread at colleges across the country, students will still likely be coping with debt. Daniels and Bair both see ISAs in their current form as an alternative to private loans or parent loans, not federal student loans, which offer relatively low interest rates and many protections.

But more widespread adoption of ISAs would help relieve parents of the burden of taking on debt and risk for their students to attend college, Delisle said. When a student hits the federal loan borrowing limit — a maximum of $31,000 for five years of school for the typical student — they turn to a private loan which typically needs to be cosigned by a parent or the parents take on debt in their own name. An ISA could replace those options.

“Parents are on the hook if students borrow more than the federal limit and to the extent we think that’s problematic, an ISA is really the only alternative to somehow removing the parents from the calculation,” he said



http://www.marketwatch.com/story/th...-getting-more-popular-2017-03-09?siteid=nwhpf
Click to expand...

cawacko said:
No one has brought up funding yet. Do you even know what you are talking about?
Click to expand...
OMG. This is worse than I thought
 
cawacko said:
Anyone have much student debt in their days? What would you think of this option if it was available to you back when?




This controversial way to finance college may be getting more popular

These students pay for college by selling a percentage of their future income to a backer



It soon may get easier for students to finance college by selling a share in their future selves.

Purdue University is partnering with Vemo Education, a technology firm, in hopes of spreading an alternative form of college financing pioneered at Purdue last year. The product, known as an income-share agreement or ISA, allows students to pay for college by selling a percentage of their future income to a backer, instead of paying out right or taking on debt. Typically, students who go into more lucrative fields pay a smaller percentage of their income during repayment, while students who go into less lucrative fields pay a larger share.

The West Lafayette, Ind.-based public college launched the first college-backed ISA for its students last year to much fanfare and immediately began hearing from other schools interested in offering ISAs of their own, according to the school’s president, Mitch Daniels. The partnership announced Thursday is an effort to help these schools get their own programs off the ground by allowing them to use Purdue’s program as a model and Vemo’s technology to more easily provide students with ISAs, without having to start from scratch.

It’s also a sign of a growing interest and market around this product amid concern about the consequences of having millions of borrowers saddled with student loan debt. “Clearly there’s a need for alternatives,” said Daniels, a former Republican governor of Indiana. “We’ve never suggested this is a complete one, but I believe it can only be helpful if it spreads and grows.”


ISAs have been growing in popularity, at least among conservative circles, for the past few years. The benefit of this type of arrangement, supporters say, is that it better protects students from bad luck. One major downside is that because of the way ISAs are structured, students might wind up paying more than if they took on a loan. The typical term for an ISA is 10 years, so a graduate who pursues a lucrative field of study could wind up paying more because the amount of income they pay out over the 10 years could exceed the amount they needed to pay for school. What’s more, the optics of a young person selling stock in themselves are not great.

Students and parents are often initially skeptical of ISAs when they’re first explained, but once asked to compare them to an equivalent loan, they typically prefer ISAs, according to Jason Delisle, a resident fellow at the American Enterprise Institute, a conservative think tank, who has surveyed families on the topic. Though the current ISA market is still pretty small, Delisle said his data indicates that “there’s potential for them to catch on.”


The Purdue-Vemo partnership can help speed up that growth. By providing both the technology and trusted advice from an academic peer who has experience with the product they can make colleges more comfortable with offering an ISA, said Tonio DeSorrento, Vemo’s chief executive.

Don’t miss: The battle for student-debt forgiveness by young farmers goes local

But one major obstacle preventing ISAs from becoming more widespread is the regulatory environment surrounding them, Delisle said. Right now, it’s unclear how they’ll be monitored and what kind of consumer protections they’ll be required to abide by, he said. Though there are signs that could soon be changing. Republican lawmakers have floated bills that would regulate ISAs and a more conservative, free-market focused administration may be more open to this kind of product.

“I see no reason to doubt that the new Department of Education will be friendlier to innovations like this,” Daniels said.

Sheila Bair, the president of Washington College, a small liberal arts college in Chestertown, Maryland, said she’s “hopeful” the new administration will be more open to using ISAs to address our student debt woes. Though the government currently offers students the option to make loan payments that are tied to their income, opting for one of these plans stretches out the term and allows the interest to build. These programs also offer debt forgiveness after a certain number of years of repayment, but that discharge typically comes with a tax bill.

“It’s all been very difficult for students I think,” said Bair, the former chairwoman of the Federal Deposit Insurance Corporation. At her school officials are looking into the possibility of offering ISAs to their students, Bair said. They’ve built some models and talked to donors about it. “We’re working on it, were not ready to launch yet, but I would love to,” she said.

Even if ISAs become more widespread at colleges across the country, students will still likely be coping with debt. Daniels and Bair both see ISAs in their current form as an alternative to private loans or parent loans, not federal student loans, which offer relatively low interest rates and many protections.

But more widespread adoption of ISAs would help relieve parents of the burden of taking on debt and risk for their students to attend college, Delisle said. When a student hits the federal loan borrowing limit — a maximum of $31,000 for five years of school for the typical student — they turn to a private loan which typically needs to be cosigned by a parent or the parents take on debt in their own name. An ISA could replace those options.

“Parents are on the hook if students borrow more than the federal limit and to the extent we think that’s problematic, an ISA is really the only alternative to somehow removing the parents from the calculation,” he said



http://www.marketwatch.com/story/th...-getting-more-popular-2017-03-09?siteid=nwhpf
Click to expand...
Hell no I wouldn't do that. I think a better way is for the Federal Government to step in and put limits on what State Universities receiving Federal funding can charge for tuition and cap administrative costs and other extraneous costs that are not central to class room education and stop them from using Students and parents as a unlimited banking account every time they want to add a new goody for the school. You could probably reduce the cost of a college education at a publicly funded University to 1/4 of what it currently is.

If extreme income inequality is creating social instability our Universities are creating a permanent middle class as many qualified students will be excluded because of the cost. Selling your soul to some fucking entrepreneur isn't a solution. It's a form of indentured servitude.
 
Althea said:
OMG. This is worse than I thought
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dear lord. How about try to have a discussion instead of making it an argument in which you can't speak on the topic.

The issue is tuition and this company is looking at an alternative method to help students finance it.

You are off on some far out tangent.
 
cawacko said:
dear lord. How about try to have a discussion instead of making it an argument in which you can't speak on the topic.

The issue is tuition and this company is looking at an alternative method to help students finance it.

You are off on some far out tangent.
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No. No I'm not. Maybe you don't read the posts in your threads before you reply? The issue is the FUNDING of tuition. Now, if you want to discuss something else, I guess you can steer your thread in any direction your drunkenness takes you.
 
Althea said:
No. No I'm not. Maybe you don't read the posts in your threads before you reply? The issue is the FUNDING of tuition. Now, if you want to discuss something else, I guess you can steer your thread in any direction your drunkenness takes you.
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LOL, you have a pretty high opinion of your economic knowledge. Impressive. The issue is paying for college, not funding it. You don't even understand the basis of the thread.
 
cawacko said:
LOL, you have a pretty high opinion of your economic knowledge. Impressive. The issue is paying for college, not funding it. You don't even understand the basis of the thread.
Click to expand...

Shit for brains funding is another word for paying.
Why so obtuse?
 
Mott the Hoople said:
Hell no I wouldn't do that. I think a better way is for the Federal Government to step in and put limits on what State Universities receiving Federal funding can charge for tuition and cap administrative costs and other extraneous costs that are not central to class room education and stop them from using Students and parents as a unlimited banking account every time they want to add a new goody for the school. You could probably reduce the cost of a college education at a publicly funded University to 1/4 of what it currently is.

If extreme income inequality is creating social instability our Universities are creating a permanent middle class as many qualified students will be excluded because of the cost. Selling your soul to some fucking entrepreneur isn't a solution. It's a form of indentured servitude.
Click to expand...

What do you call being in debt to gov't $100K?
 
cawacko said:
What do you call being in debt to gov't $100K?
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So your solution is to change masters? I'd rather owe the Government than some psychopath/sociopath businessman and there are far more of those in the business world by orders of magnitude than there are in Government.

Let me ask you this. How did you pay for your college education or did you?
 
Mott the Hoople said:
So your solution is to change masters? I'd rather owe the Government than some psychopath/sociopath businessman and there are far more of those in the business world by orders of magnitude than there are in Government.

Let me ask you this. How did you pay for your college education or did you?
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I didn't have to, I was lucky.

I have not said this company is going to be successful or this is the answer to financing education going forward. But considering the amount of student that exists right now it is not a surprise that tech firms would be targeting this market.
 
I think a big way to reduce the cost burden on students is to make degree plans more efficient and less broad. For example as a livestock management major there's no logical reason why I should have to take classes in areas like literature, sociology, psychology, philosophy, art, history, and other courses unless they can be directly tied to my major. Thousands of dollars goes towards taking basic level classes that often times do not have anything to do with your major. I also don't think that college is for everyone and that the option of going into a trade school is an overlooked thing.
 
Norah said:
I think a big way to reduce the cost burden on students is to make degree plans more efficient and less broad. For example as a livestock management major there's no logical reason why I should have to take classes in areas like literature, sociology, psychology, philosophy, art, history, and other courses unless they can be directly tied to my major. Thousands of dollars goes towards taking basic level classes that often times do not have anything to do with your major. I also don't think that college is for everyone and that the option of going into a trade school is an overlooked thing.
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That's the joy of a liberal arts education. The purpose, dating back to the University of Paris in the Middle Ages (if not Plato's Academy and Aristotle's Lyceum), was to enlighten the mind/spirit of the student. It wasn't designed to land them a particular job.
 
cawacko said:
LOL, you have a pretty high opinion of your economic knowledge. Impressive. The issue is paying for college, not funding it. You don't even understand the basis of the thread.
Click to expand...
fund·ing
ˈfəndiNG/
noun

  • money provided, especially by an organization or government, for a particular purpose.
    • the action or practice of providing money for a particular purpose.




 
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