Yesterday SOH posted a question about Oregon's proposed college funding. Attend at no cost and then pay 3% of your earnings for the next 24 years. If you were 18 and had no college fund, would you take this deal? If no, what would you do?
As opposed to NOT having a degree and permanently limiting my income potential?!?
And you shouldn't need a degree to figure out what an economic advantage education is.
It'd be a tough call, but I'd probably pass and pursue traditional financial aid + loans. It would basically come down to placing a bet that my 24-year earnings would be higher than the "break-even" point.
Never. I worked and lived with my parents. If I had not had those options, I would have taken a loan.
I'm with Shelly below. I won't take this kind of gamble. It's sort of a loan with unknown liability. I like to know what I owe and then pay it off as soon as I can.
So you're going for a fixed point vs a %. I can see the value in either approach. I think the option is a good idea as it makes college more accessible to those who want it.
I wouldn't take it myself. I don't want to fund it for others either, but that takes us into a discussion that belongs in Tony's poll.
You are in Oregon, how do you feel about the state going into this gamble with your money? It's like a reverse version of the long term care insurances which have turned out to be a terrible business for insurance companies.
The program is intended to become self funding, the tough part would be finding the capital for the first wave of students. Bonds perhaps? I would buy some to help seed the idea.
I think it's a great idea, makes higher ed more accessible and provides a funding source. Also provides them an incentive to provide a quality product. As an employer, it gives me access to a better educated workforce.
The Wall Street journal had an article about it Tuesday where it said the state would likely take a loan, not specified what kind of loan
You are assuming the program will be self sustaining and will give better or more candidates. I don't see any guarantee for either.
I think you can only read the WSJ article if you subscribe. "Dave Girouard, chief executive of Upstart, a Palo Alto, Calif., company that seeks investors to provide capital to professionals for a guaranteed percentage of their future earnings, said ...
... Oregon plan could suffer because it might turn off students with the biggest earning potential, for whom traditional interest rates would be preferable to promising a share of future income. What you don't want is a program filled with ....
... "people who don't intend to work as hard or have a bias toward earning less money," he said."
End of quote from article
Thx for the link, it's a good read. Yes, it's a gamble with a long payoff that may not be in my lifetime. But it's a novel idea and I would support it as long as academic standards remained the same.
This would be a huge break for me if they did that here.
I would jump on the offer!
I would use traditional federal financial aid and loans
Curious, why? I covered college through a combination of cash and Navy Tuition Assistance and was able to graduate debt free. In the same circumstances (poor family) I would consider this. Federal aid is going away and loans don't care what u earn
That being said, it's a gamble. If you were getting a STEM or other high paying degree this could be spendy. But the idea is to boost the economy, you get your training then help people that come after you.
I don't know why - it seems like an indebtedness that is unknown and that seems scary somehow
I don't see it as debt, if you're not working or you are underemployed, you're not starving to pay a loan. And if the degree pays off big time (like it did for me) then I'm happy to pay more.
I should add, if I took this route I would have graduated 4 years earlier and the increased earning potential of those 4 years would have covered the 3% x 24.
Either get loans or get a job
That's essentially what the proposal is, a loan. Just a different sort.