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Comment by ibejoeb | Hacker News Reader

> ...there may be no reliable price signal about the long-term financial risks inherent in different courses of study.

So credit availability and interest rate is going to be directly related to what other people ahead of you studied in school and how well they settled the debt. Also:

> Educational institutions may have incentives to funnel students into areas that do not maximize students’ future incomes or employment prospects.

I guess they do. Unfortunately, the instituions are not even a factor. As far I can tell, the proposed solution is to deprive the student of the opportunity to get involved in that "low-value" field. Then, indirectly, we punish the institution by reducing revenues. Interesting.

It's an interesting read.

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I didn't read past the abstract, but it seems that fair risk assessment would have to include not only the potential income from the intended course of study but also likelihood of completing the course and overall credit history of the borrower (actually his/her parents, as most students won't have a credit history yet).

Easy credit for tuition has no doubt contributed to increases in tuition that are way out of line compared to overall inflation. This works to the detriment of everyone pursuing higher education, as you (or more likely your parents) are either spending a lot more than the education is really worth, or you're ending up deep in debt as you start your professional life.

As far I can tell, the proposed solution is to deprive the student of the opportunity to get involved in that "low-value" field. Then, indirectly, we punish the institution by reducing revenues.

Institutions need some price pressure. Tuition costs are out of control. Even state institutions are regularly raising tuition every year by the maximum allowed by their legislatures, and tacking on various other "fees" to raise the overall costs even more.

Disagree, if a student wants to pursue computer science he/she should have a lower interest rate than a philosophy major. There is a much higher likelihood that the CS major will pay back the loan soon.

There is a bit of a naivete among college students, that having any degree from "X prestigious university" is enough for the big boys to respect them and give them a high paying job. As a consequence I know many graduates who end up working as waiters etc. Perhaps had this tradeoff been made more evident from the beginning, they would have made different choices.

The student isn't deprived of their opportunity to get involved in low-value fields, but that low value is more apparent, which should help their decision process.

And more high value graduates, with higher incomes and a better ability to donate back to the university would probably increase revenues in the long run.

I've heard an even crazier idea.

Have colleges charge a percentage of a student's future income. This aligns economic incentives for the student and the college.

What if I just want to take a few foreign language classes? Does a percentage of my income as payment make sense?

Or I'm self employed and want to get another degree at night just because I can. Does a percentage of my income as payment make sense?

What if I studied art history, but the side project I was working on after classes was acquired by Google for $30 million and now they're paying me $200k/year as part of the deal. Does a percentage of my income as payment make sense?

You're arguing with a straw man. Nothing about that plan precludes a fixed fee option in situations where a future percentage doesn't make sense.

> Nothing about that plan precludes a fixed fee option in situations where a future percentage doesn't make sense.

That doesn't really answer his questions though.

Professionally, I work as a software developer and a farmer. If I had taken the percentage of future income option while receiving my CS degree thinking that's all I'd ever do, would the school be entitled to the profits from my farm too?

I didn't even consider farming until I was 26, so it's definitely in the realm of possibility.

I'm massively curious about how you got into farming and how you do that alongside software development.

I grew up on a farm, so I was not without connections, but it was actually on the suggestion of my father that I got started down that path.

I knew pretty early on that programming was my thing. That was where I put all my focus, getting my first part-time dev job in high school. Farming wasn't even a consideration in my mind. It was only after working full-time in the software game for a few of years, dad approached me and suggested that I take some of the money I had earned, find some land to rent, and buy some crop inputs with it. I agreed that it sounded like a good plan, and he helped me put it in motion.

My farm is strictly cash crop, so the work is highly seasonal. Right around this time in the spring and later in the fall there is a lot of work to do, but the rest of the year is fairly light on the time required of me. The second thing that made it work is that I was already telecommuting and my hours were flexible. There have been days where I've been in the field all day and working on code all night. Additionally, it's not completely unheard of to find me writing code from the seat of the tractor. Mobile internet access has been a lifesaver.

I hadn't really considered this to be an interesting topic to the HN crowd, but maybe I should write up a more detailed blog post about it?

>but maybe I should write up a more detailed blog post about it?

Yes you should write more about this. It's fascinating.

And to answer your previous question about whether the college would get a percentage of your farm income, I would have to say yes.

The option of limiting their stake to a particular profession would introduce too many loopholes.

For instance I could get a math degree, and sign something giving them a share of all future earnings as a mathematician--then work as a programmer instead. That being said I'm sure there could be some sort of maximum.

Student loans already work somewhat similarly. There is an option to pay off loans based on a percentage of your total income, so you are in effect paying x percent of your income for y number of years.

Do you mean that, for example, studying law would be more expensive because there is a high probability of future income? Whereas, say, astrophysics would be very cheap because there's a good chance that you'll stay in academia?

uhhh no, opposite. the university would have a greater incentive to foot the bill for your law degree because lawyers will probably make more money, therefore giving them more money.

too extreme. I like the concept: less students would be funneled into liberal arts majors that don't have a high return if the schools realized that they could get a percentage of every bill gates they spit out.

some cs and engineering programs are shut down because they are the most expensive to run. this would reverse that trend.

seems kind of like VC applied to schools. but then the schools would have to be completely free: we are giving away a percentage of our company, we share in returns with our investors, but we sure as hell aren't paying them.

I wonder if the institutions would drop the price on credits in "low-value" fields and move away from one $ per credit rate?

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