Mitch Daniels (now as Pres of Purdue) Fund college students in lieu of loans & get % of their pay

[salin]

I challenge my fellow DUers to find the policy flaws in his call to turn funding college.

Full article is here: http://www.indystar.com/story/news/2015/03/17/daniels-asks-congress-try-alternative-student-loan/24911835/

Excerpt is below:

Fund kid’s college to get cut of future earnings?

WASHINGTON – Purdue University President Mitch Daniels would like to give students another way to finance their education.

Instead of taking out a traditional college loan, students would have the option of finding an investor — possibly a Purdue alum — to finance their degree in exchange for a share of their future income.

But to try that idea, Daniels told members of Congress on Tuesday, he needs federal legislation.

more at link. Source of the concept (per the article) is our beloved Milton Friedman circa 1950 when the costs of college were miniscule compared to today.

[wilt the stilt]

1. I think this is called

indentured servitude.

[salin]

3. my reaction as well. Yet, here he is testifying before Congress.

To change laws to make this a reality.

I doubt that the current congressional majority would view this as indentured servitude, I rather imagine they would view it as "investment opportunities" - aligning with those who could profit.

[Adrahil]

18. Well.....

I had a not dissimilar arrangement years ago. It was a federal program that paid for my college. In exchange, I agreed to work for the Federal Government for a number of years in exchange. However, my salary was not garnished in any way.

[cyberswede]

2. My student loan payment *is* a percentage of my earnings. nt

[salin]

4. Is it 18% which is the example given in the article?

And I would guess the 18% is based on pre-taxed income.

[cyberswede]

15. Not sure if I calculated correctly, but I think it's about 5%

The interest will add up to a lot by the end, of course. Maybe that's the advantage.

[salin]

16. The devil will be in the details.... but it's mitch daniel's plan

and I lived with him as gov for years. Call me skeptical.

[cyberswede]

17. Oh - I'm definitely not in favor of it...

I don't even see how it's beneficial for the student. I also wonder how the companies that currently benefit from making student loans will like the idea. And Friedman sucks.

[PowerToThePeople]

5. great plan

to keep power in hands of the oligarchs.

Hey dipshit, you can already do this. It is called a private loan. So, you want to make access to higher education based on ones access to a wealthy private investor?

I have a better idea, how about free tuition for all those who qualify and desire to further their education?

How did such a dumbfuck get into a position like that? Oh wait, I know the answer to that question.

[Jenoch]

6. The problem is not college loans.

The problem is 'big education'. The cost of attending college has increased faster than the rate of inflation by a HUGE percent (I didn't take the time to look it up).

The spending at colleges and univereities is out of control. It used to be that a college student could save money and work summers and part-time during the school year and pay their own way (at state universities anyway) but that is tough to do now.

[Elwood P Dowd]

7. When I attended college in the 1960s tuition was less than $400.00 a year.

I worked part-time jobs during the school year and full-time jobs during the summer. Paid for everything except tuition, and my lower middle class parents paid that. Their total cost for my degree was less than $2,000.00.

Back in those days the college President made about $30,000 a year plus the school furnished a car, cooks/maids, security, and free housing on campus. The current one makes about 2 million.

[Jenoch]

10. My brothers and I attended college in the

late '70s to the mid '80s (I was the youngest). We came from an upper middle class family but our father had a business setback so he made enough so we did not qualify for financial aid but not enough to pay tuition for three that had a lot of overlap. We paid our tuition, books, and living expenses ourselves. (They did pay for our auto insurance on cars we bought ourselves).

I don't remember how much I paid for my college degree. I do remember taking out a student loan and putting it into a money market account that paid about 12%. remember the high interest rates from that time?

[greatlaurel]

8. The reason people could pay for school working summer jobs was that states subsidized the colleges.

State funding for universities has been gutted. This started under Reagan. There was a time when state universities received quite a bit of funding from the state and that kept tuition low. Once the state subsidies were slashed the schools had no reason to control costs plus they could just pass it all onto students who would borrow the money to pay.

There is much wasteful spending at the universities, mainly on top administrators and football and basketball coaches. The failure of elected officials to reign the outrageous salaries is just another symptom of their disdain for education.

[Jenoch]

11. I don't know why Reagan is blamed for cuts

in state subsidies. In Minnesota, there is still quite a bit of state funding. I still think the problem is overspending.

I also think that the wasteful spending is on the administration side. The high profile sports such as football and men's basketball usually bring in enough money to pay for all of the rest of the sports.

[Bluenorthwest]

19. Gee, maybe because Reagan started the cuts as Governor of CA, then pushed the same as President?

I think that might be it. There is a huge push on DU to defend Reagan, but the man was Governor of CA for 8 years prior to running for President and he had a long resume of right wing nastiness that was well known to all who voted for him. Make no mistake, Reagan voters voted for far right wing policies and rhetoric.
As Governor, Reagan was asked about the student protests on campuses. He recommended a bloodbath to put an end to it. A bloodbath. Kent State was three weeks later. People who voted for him knew that.

[Jenoch]

24. Ok, I was referring to

state higher education subsidies nation wide in the 80s while Reagan was president.

[greatlaurel]

22. Reagan was the test case for the destruction of public universities that's still going on.

http://www.berkeley.edu/news/media/releases/2004/06/08_reagan.shtml
"Kerr was fired three weeks after Reagan took office. The act was the culmination of a process that began long before, when then-FBI director J. Edgar Hoover first tried to persuade Kerr to crack down hard on Berkeley students involved in the 1964 Free Speech Movement, which Hoover alleged was a front for communist sympathizers. Unable to convince Kerr, Hoover turned to gubernatorial candidate Reagan, a rising conservative star. As revealed by a 2002 investigation by San Francisco Chronicle reporter Seth Rosenfeld, Reagan and the FBI interacted throughout the campaign about dealing with Kerr and the student protesters."

"John Douglass, a historian and senior research fellow at UC Berkeley's Center for Studies in Higher Education, faulted Reagan for a "failure to understand the importance of the University of California in the life of the citizens of this state." Douglass said that after his election in 1966, Reagan proposed cutting the UC budget by 10 percent across the board. He also proposed that, for the first time, UC charge tuition and suggested that Berkeley sell collections of rare books in the Bancroft Library. By and large, Douglass said, these measures were not approved by the Legislature, but lesser funding cuts were imposed.

Ray Colvig, the chief public information officer for the campus during these years, said the notion to sell rare books was quite telling. "Reagan did not think you needed a great university supported by public funding," said Colvig. "He thought if you wanted a world-class university, let the students pay for it. The idea of selling rare books went along with that.""


http://thebackbench.blogspot.com/2007/08/tuition-at-university-of-california.html

'Ronald Reagan insisted on two things upon taking office as governor of California. One was the head of Clark Kerr, president of the University of California. The second was the imposition of tuition on UC students. Kerr was soon gone, replaced by Charles Hitch."

[greatlaurel]

9. This is a repulsive idea.

Disgusting suggestion.

Let's just make tuition free for every qualified student.

[Contrary1]

12. Hell, Mitch...just sell these students to a foreign country

Like you did with the Indiana Toll Road. The Aussie Company that took it over filed for bankruptcy.

What could possibly go wrong with his latest brilliant idea?

[greatlaurel]

23. Great post, thanks! nt

[bobclark86]

13. So, do the same thing as now?

Still a better rate of payment than those who have defaulted and see 20 percent come off the top of each check.

BTW, I'd prefer something like this: I promise to live in New York and pay New York taxes for the next 15 years if you pay for my college. As opposed to most upstate SUNY students who leave the state the second they graduate.

[Vinca]

14. Why does this seem similar to the bogus mortgage lending that brought down the economy?

Somehow an insurer will be involved and somehow the fat cat will rake in millions while the students are hounded by debt collectors for the rest of their lives. We could always try Plan B instead. Affordable college fees average people are able to pay.

[Bluenorthwest]

20. In November, Oregonians rejected a proposal that would have created a tax payer funded system

which would make education loans to be repaid as a set percentage (it was low) of income over a period of time. No private donors, ramp up to be tax funded then later the program would self fund. We did not pass the bill.

[salin]

21. I much prefer that proposal

How badly did it fail? What were the negatives?