notadocParticipantStatus: Other ProfessionalPosts: 254Joined: 07/15/2016
‘To pay for college, Amy Wroblewski sold a piece of her future. Every month, for eight-and-a-half years, she must turn over a set percentage of her salary to investors. Today, about a year after graduation, Wroblewski makes $50,000 a year as a higher education recruiter in Winchester, Va. So the cut comes to $279 a month, less than her car payment.”April 10, 2019 at 7:02 am MST #205441
This approach was bandied about for universities to provide financial aid this way.
So far, not one university thinks it’s worth the risk. The value of the education isn’t worth the risk!April 10, 2019 at 7:08 am MST #205446The White Coat InvestorKeymasterStatus: PhysicianPosts: 4392Joined: 05/13/2011
Wrote an article on this. It’ll run in a few months.
There are several universities that are doing this including my local state U.
Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011Hober MallowParticipantStatus: Other Professional, SpousePosts: 35Joined: 01/01/2018
There was a Planet Money podcast on this recently. It talks about another Purdue student that used this method in place of loans.PanscanParticipantStatus: ResidentPosts: 902Joined: 03/18/2017
I enjoy how they break the rates and duration down by major. That is how loans should be and hence why they should be private. The loan rate to be a doctor or engineer should not be the same as a liberal arts major.
The risk for the bank is extremely correlated with the major. I have no idea why the rates should be the same.PanscanParticipantStatus: ResidentPosts: 902Joined: 03/18/2017
I wonder if there are working stipulations like they must work full time or etc? Is it taxable income or gross? Seems like this would incentivize working part time and maxing retirement contributions if its taxable income.April 10, 2019 at 8:51 am MST #205472jhwkr542ParticipantStatus: PhysicianPosts: 1217Joined: 02/15/2016
I haven’t quite figured it out, but I do not like this plan. Perhaps it’s an incentive to keep salaries low or that it shackles people for 10-12 years. Of course I don’t really like the current system either. This is akin to politics fighting over how people should be able to pay for healthcare when the biggest problem is the price of healthcare itself.PedsParticipantStatus: PhysicianPosts: 3988Joined: 01/08/2016
There was a Planet Money podcast on this recently. It talks about another Purdue student that used this method in place of loans.Click to expand…
yes planet money!April 10, 2019 at 9:26 am MST #205480White.Beard.DocParticipantStatus: PhysicianPosts: 842Joined: 02/06/2016
What happens when the student drops out and goes to work in a fast food restaurant?
“The 6-year graduation rate was 59 percent at public institutions, 66 percent at private nonprofit institutions, and 26 percent at private for-profit institutions.”April 11, 2019 at 1:59 am MST #205610
I look forward to the first collection efforts. Is this going to be considered “private debt” that could be disputed?
Looking at just one physician contract, compensation to be used is debatable. Stock options?
Currently recruiting tool for internships in highly competitive fields.April 11, 2019 at 3:52 am MST #205614
Fast food is my job.
My side gig is a profitable hobby (cough, cough).
I buy and sell companies. (cough , cough)
Naw, it’s a commission “draw” not earnings”, an advance.
Carried interest. You know the deal.ENT DocParticipantStatus: PhysicianPosts: 3353Joined: 01/14/2017
These income sharing agreements are being done on a limited basis, Purdue being the most noteworthy. However, their program is very limited to people taking on additional private loans.
Having Wall Street be the one assuming risk isn’t the right answer unless you disengage the federal government from guaranteeing loan payment otherwise. Maintaining the third party guaranteed payer situation does nothing to address the main problem – elevating price – because it’s the cause of the problem.
The ideal solution would be for, as in medicine, for those providing the services (education, medicine) to assume the risk and for the users to take it or leave it in terms of the premiums or tuition. This actually inspires competition on value, which in any normal circumstance should drive down price to help the consumer.