Walt's Working Lifetime Student Loan Plan – Life-Work Loans, Rhetoric Funds?
Some years ago watching another ‘save’ just ahead of another CCD financial crisis that could cost me classes, I proposed a very similar program to the financing plan proposed by Oregon, California and now other college students. Great minds think alike, and necessity is the mother of creativity.
We claim that education is the greatest economic multiplier, which I’ve researched and lobbied. While our representatives continue to ignore the good business of government and abrogate their Constitutional mandate to fund public schools, we come up with creative necessities. Or am I being to cynical when I’d hoped for critical thinking?
So, bank on our own rhetoric, literally. If a student’s income does not increase over a working lifetime, then they just pay back their tuition. If their income increases 1.8 to twice as we claim, the college fund grows. And a few wealthy alumni careers rake the college fund gains.
University students generally have a 40 to 50-year working life, slightly less for community colleges with large numnbers of older returning students, but you can use each schools demographics. We can use the current averages to calculate. The community college students are less likely to finish a degree, but still gain, so loan rate should be figured in credit hours and sum the credits taken. Census has working life figures for non-college incomes. A 2 year Associates degree should add 1-2% to income tax and a 4 year Bachelor degree should add 2-3%, more for Masters or Ph.D. State and IRS may assist, especially to coordinate multiple colleges, with the note that this is exactly the kind of debt that former students should feel positively about, and even gloat upon. Use taxable income rather than gross income to alleviate poverty periods. State and federal revenue departments can easily provide the conduit.
I should also note that the Oregon Students used only a 20 year span to estimate returns and came to 1.5-3% rate, likely on gross rather than net income. Since many make more in their later career, we should figure the full working life. Still the basic formula remains the same. Given average working lifespan for your students, and current income they wish to incriease with your education, what is the rate to repay the loans over this average working career? If this education boosts your income as we claim, we both gain.
Most colleges currently hold large reserves but grants may increase the funding before the working life returns that should equalize about half way through, 15-20 years. To ease the paperwork and increase gains, a college bank or credit union, or a state or employees’ bank or credit union (or pension fund?) may also take deposits from faculty and staff to increase the Rhetoric fund. Normal loans may return better, so this reason for existence should be included in the charter. I do like the idea of more credit unions and small banks.
With or without the banking ideas, this is form of student loan has legs. Should draw fiscal conservatives too.
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