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Comment by austenallred | Hacker News Reader

In a word: incentives.

It’s not about the payment structure alone, it’s about a school that is incentivized to make its students successful. IBR is just taxpayers swallowing the bill when schools fail.

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Yes, it's simple: Lambda School has skin in the game. Traditional universities have no skin in the game. Hence why we have a rent-seeking university system that hoovers money away from hard-working parents (and students), while putting those same parents and students at financial risk.

But then such schools that predominantly work on ISAs, will pre-select for good students, who are most likely to succeed and also for industries where the compensation is higher. Remainder (which is arguably 90%+) of the students will still be at the mercy of other schools + taxpayer.

It seems, this just provides one more payment option to students who are likely to succeed anyway and a refreshing business model for schools that move early into the space.

It doesn't address the real problem with schools i.e. making the 20th%le student successful and not a taxpayer burden.

> But then such schools that predominantly work on ISAs, will pre-select for good students, who are most likely to succeed and also for industries where the compensation is higher.

That still sounds far better than the current system of selecting for the most popular (instead of valuable) subjects that draw in the most clueless students to get indebted for life for something they are unlikely to succeed in anyway.

> It doesn't address the real problem...

What does?

Exactly. With a federally garanteed loan no less! The school has incentive to take you and cater to your fanciful wim major, its free money to them up front and your problem (repayment) later.

> But then such schools that predominantly work on ISAs, will pre-select for good students, who are most likely to succeed and also for industries where the compensation is higher.

That actually sounds like a good incentive structure to me. Most people shouldn't study something that will not give them some advantage (which these schools would select for).

If you struggle to make ends meet it wouldn't be a reasonable decision to study something unprofitable in the first place. I wish it was different and everybody could invest an infinite amount of time to learn what they are interested in, but in a resource constrained reality that's not possible and individuals have to make decisions that are advantageous for them.

By definition and practicality, schools and fields of work will remain a pyramid i.e. at any given time, there will only be a few fields and colleges that "give advantage", being able to absorb only a fraction of students by competition. e.g. field of programming can only absorb a million odd engineers in next few years. (Ironically, when it absorbs more, it will no longer remain a field with high wages).

The remainder of the iceberg hence, will need to go to other lower parts of the pyramid. ISAs won't do anything for that. Only the government will. And the Govt does it for us, with our money, because not providing education to lower levels of pyramid will result in nothing but societal anarchy.

ISAs hence shouldn't be hailed as panacea for education loans which is what marketing makes us believe. The only advantage of ISAs, is that they unlock better education for some "motivated students" (for lack of an accurate phrase) from underprivileged circumstances. That's not a trivial advantage for those who qualify. I don't know what that % of population is, but it can't be much.

In any case, however small, that number sure seems enough to build a business around it with some feel-good marketing (like this article).

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