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Comment by nemesis1637 | Hacker News Reader

I think Warren Buffet once said that he'd give college graduates $100,000 now for 10% of their lifetime income. This kind of reminds me of that. And begs the question, should somebody build a platform to make transactions like this more easily possible?

Edit: I just remembered Upstart (https://www.upstart.com/)

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We already have things that give you money now and take 10% of your lifetime income. They're called colleges. Well, except the "give you money now" part.

Colleges take a flat fee. If they worked for a percentage, then (a) they would probably try harder to increase the lifetime earnings of their students, and (b) tuition would be de facto subsidized by the students who go on to earn the most money.

There are serious efforts to move towards "income dependent repayment," sincerely intended by their advocates to help people.

But solve for the equilibrium: colleges can now increase costs even more, and rely upon the state to collect their fees for them in perpetuity.

Don't forget governments, which tend to take a much larger portion of your lifetime income.

Bingo. 250,000 paid back over a decade with interest is a sizeable chunk of lifetime earnings.

Are people actually going into $250k of debt just for an undergraduate degree? I wouldn't even consider that sort of debt unless it was for medical school.

No, no one is (without some weird circumstance like their guardians are able to pay for the college, but would rather take on debt for tax/other reasons). Average debt is about an order of magnitude less, and I believe the mean is even less. Avg is pushed up by bad schools charging absurd fees.

You mean the median is even less, right?

Yikes, yes.

It isn't the norm, but yes. Folks have generally settled on that number as the benchmark college debt because it is very dramatic, but still not so far off in fantasy that you could call it false.

What is the actual average debt on graduation? ~$27,000

> What is the actual average debt on graduation? ~$27,000

That does not seem bad at all, though I suppose I am coming from the perspective of being employed immediately out of school in your field, which obviously is not the case for everyone.

Does anybody know what the average time to pay off that sort of loan is? I'm assuming that any undergraduate, regardless of degree, could expect to have that same average debt, but maybe that isn't true either.

> That does not seem bad at all

Which is why people on HackerNews prefer to quote boundary cases like $250k

It's not just HN, everyone seems to be in love with that number. Reddit, old media, etc. Previously I thought I was some sort of extreme/lucky outlier for getting out with a little less than $25k.

Amusingly, if the graduate's average yearly income over the career is $62500 (about right for a median college graduate) and the length of career is 40 years, then it comes out to exactly 10%.

So I should be offering no more than $50K upfront for 10% of future earnings.

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