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Comment by karamazov | Hacker News Reader

This has a critical flaw: those expecting to work in a high-paying field will self-select more traditional loans, whereas those pursuing a degree with less promising income expectations will disproportionately opt for this type of loan.

If a university (or a state) chooses to force everyone to study under this model, they'll find that students expecting high-paying jobs will go elsewhere, and students expecting low-paying jobs will flock to those schools.

Fundamentally, if I'm planning to study CS for the next four years, it's a good bet that I'll be making more money than someone getting an English degree; and I don't particulalry want to subsidize their education with my future earnings.

There's a close parallel here with John Galt quitting his job in Atlas Shrugged.

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This is the part I am always confused. If we all know graduates getting an engineering degree(CS,EE) make more money than graduates with english/arts degree. We should see an obvious trend students heading to engineering majors. Why still so many students go to english/arts/... major and they know they will make less promising income?

Isn't it obvious that it's because they aren't interested in a career in engineering? For some people having a higher income is not more important than having a career that they enjoy or that inspires them.

Why still so many students go to english/arts/... major and they know they will make less promising income?

Many -- I'd say even most -- students base their careers on something besides projected income. I think this is a very good thing.

Unfortunately they're taking on massive amounts of debt that will make their life more difficult. If they could only receive a loan for a percentage of their projected income then they'd be able to decide if it's worth it. And it would put price pressures on the school.

We should see a obvious trend students heading to engineering majors.

Yes, especially people with childhood dreams of studying history or art will be turned on by the prospect of designing airliners and nuclear reactors.

Same could be said of doing a MBA or medicine compared to STEM. Yet few people on HN made that choice.

Not the same thing. Once you're in a US college, you can pick your major, whether that's English or STEM. But for Medicine or MBA, you need to be admitted to a postgraduate program. I remained a STEM because I didn't have the grades for medicine. Didn't "choose".

that's a good point, shows my European bias. In France at least, entering in medicine or decent engineer career path requires similar level of grades. Entering into a MBA would be similar to get a very good engineer degree (grade-wise, skills being different obviously)

Not even close RE: MBA. There is an insane glut of MBAs because of rational choice to go there where MBAs used to have a ton of opportunity. Then the economy crashed and now STEM fields are being mined for business intelligence / game theorists that can learn rudimentary business practices on the fly (or the company will pay for a night-time MBA).

The majority of people who struggle with getting high paying work after an MBA previously struggled with getting high paying work as a Stem graduate. Something like 40% of MBAs are engineers.

From my limited experience with the matter, it's because 18-year-olds are stupid.

How is this any different than simply raising taxes and providing education at minimal cost with no loans?

As always, the US drops the ball again.

Small evolutions are easier than big revolutions.

Evolutions take a long time. Can we as a nation really afford the luxury of waiting?

It's an opt-in tax only on the people that receive the benefits of the program. I actually like that idea; it wouldn't work for everything, but I think it can work for higher education.

So its like health insurance if you don't make it mandatory. Only the people who are going to maximize their utilization of it are going to opt-in.

Hence why it has to be a blanket tax. How many people would opt-in to social security if it wasn't mandatory?

Most of the people most likely to want to opt out are, I imagine, already effectively doing by not going to the Oregon state schools and going to, say, a highly ranked private university. Or they might be getting substantial scholarship assistance as it is (it's unclear to me how this would work under the new system, the article could use more details there).

There are a lot of students out there who don't go into college with the sort of super-high self-confidence that would cause them to turn down a free education because they think they'd be better off with a traditional loan. So the question is: will enough of them make enough money to make it a workable solution? My guess is yes.

At a 100K salary, over 24 years you would pay 72K. The same cost of 72K as a loan at 6.8% paid over 24 years would amount to $146,229.96 with total interest paid of $74,229.96

That's more interest than the cost of the loan. You would have to average more than 203K a year in salary in order for this to be the wrong choice. The average student isn't going to come close to that. Do you really expect that you'll be making more than an average of 203K over the next 24 years?

At 100k salary why would it take 24 years to pay back a 72k loan?

I used 100K as an example that even at that high of an income $3,000 a year only adds up to 72K. If you make 50K salary for 24 years you're still only paying 36K for your education. The program stats "students would pay 3 percent of their paycheck back for 24 years in order to help fund the program for future students".

With the direction higher education costs are moving, this could be a very inviting choice for those who would pay for college with student loans.

The problem here is that it is obvious there are a lot of students that would not be able to pay current tuition from their earnings. If there were none, current loan system would work perfectly. So there will be subsidizing. It works only if you dont know in which category you will fall - like with insurance. Once you know on which side of the equation you are - you will have definite incentives to either maximize or minimize use of this system, and this will make it unbalanced and unsustainable in the long run, since potential high earners would try to avid it - they have no upside there - and potential free riders would flock to it.

> and I don't particulalry want to subsidize their education with my future earnings.

Then do you oppose the idea of public universities generally? Atlas Shrugged is a work of fantasy and light philosophy; I don't think it's relevant to the problem at hand.

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