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Comment by kotrunga | Hacker News Reader

Three questions I haven't seen answered yet...

1) What if you make $40k even? Is the 15% adjusted based on your salary?

2) What happens if you lose your job 1 year in? You've paid back half your debt... what about the other half? I would feel bad telling people about this to see them do it, and then get jobs (either with Modern Labor or somewhere else), and then a year in they get cut, have no job, and are thousands in debt.

3) What if someone is in the program, and halfway has to drop out for xyz reason? Do they owe the money back?

I really like the idea, just wish there were some more details so I could feel confident telling friends about it.

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3) If they drop out, we cut the amount of months owed to the proportion of the program attended. So if they do 50% of the program and drop out, they owe only 12 months (50% of 24).

thanks for the quick replies!

And just to clarify... if the program lasts 5 months, and they drop out of the program 2.5 months in (and they would have received $5k so far), what would they would owe..?

15% of income for 12 months instead of 24 months.

The $40,000 threshold is inclusive. So if their income is equal to our greater than $40,000, they owe 15%. If they ever dip below $40,000 payments stop until it goes back up to $40,000.

You should consider making these payback rates marginal (such as 20% of all income above $40k instead of 15% of all income).

As is, there's a weird gap in incomes ($40-47k, roughly) where you'd end up taking home more money by taking a voluntary pay cut.

Totally agree. I think in the future -- as the market for income share agreements becomes more sophisticated there will be marginal rates. Right now the complexity tradeoff for the customer and the financing means we aren't doing it for a while though.

I'm curious about this, does this expire after so many years or is this a new student loan situation that lingers forever if someone is unable to find meaningful (over 40k) employment ever.

Our current contract has a 5-year maximum deferment period, meaning if they don't earn above $40,000 for 5 years, the contract ends and they no longer owe anything.

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