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Education payments being based on income.

JP Hochbaum

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I like this idea:

"Oregon's legislature is moving ahead with a plan to enable students to attend state schools with no money down. In return, under one proposal, the students would agree to pay into a special fund 3% of their salaries annually for 24 years."

"Using 2010 census data not adjusted for inflation, Mr. Gettel estimates students would pay an average of about $800 back into the program the first year after graduation. As their incomes grow, that would increase to about $2,000 in year 20, by which time they would have paid off the cost of their educations."

Oregon Is Doing Free Higher Education the Right Way | Demos
 

ttwtt78640

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I like this idea:

"Oregon's legislature is moving ahead with a plan to enable students to attend state schools with no money down. In return, under one proposal, the students would agree to pay into a special fund 3% of their salaries annually for 24 years."

"Using 2010 census data not adjusted for inflation, Mr. Gettel estimates students would pay an average of about $800 back into the program the first year after graduation. As their incomes grow, that would increase to about $2,000 in year 20, by which time they would have paid off the cost of their educations."

Oregon Is Doing Free Higher Education the Right Way | Demos
While this system sounds good if implemented nationally, it has some problems on a state/local level. One of which is that once one leaves Oregon it amounts to taxation without representation, as they are then liable for their current state's (nation's?) taxation but not Oregon's. Another problem is that one may attend 2 years of school in Oregon, and finish their school (in another 4 years?) elsewhere then they would be liable for a larger repayment amount to Oregon, but based on money earned largely by education received (and paid for) elsewhere.
 

JP Hochbaum

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While this system sounds good if implemented nationally, it has some problems on a state/local level. One of which is that once one leaves Oregon it amounts to taxation without representation, as they are then liable for their current state's (nation's?) taxation but not Oregon's. Another problem is that one may attend 2 years of school in Oregon, and finish their school (in another 4 years?) elsewhere then they would be liable for a larger repayment amount to Oregon, but based on money earned largely by education received (and paid for) elsewhere.
I don't see anything in the bill about it being a tax?

Did I miss that?
 

ttwtt78640

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I don't see anything in the bill about it being a tax?

Did I miss that?
What power would you suggest that the Oregon gov't use to get folks to pay into their "special gov't fund"?
 

JP Hochbaum

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What power would you suggest that the Oregon gov't use to get folks to pay into their "special gov't fund"?
How does Sallie Mae do it? It aint rocket science here.
 

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I like this idea:

"Oregon's legislature is moving ahead with a plan to enable students to attend state schools with no money down. In return, under one proposal, the students would agree to pay into a special fund 3% of their salaries annually for 24 years."

"Using 2010 census data not adjusted for inflation, Mr. Gettel estimates students would pay an average of about $800 back into the program the first year after graduation. As their incomes grow, that would increase to about $2,000 in year 20, by which time they would have paid off the cost of their educations."

Oregon Is Doing Free Higher Education the Right Way | Demos
What I like about it is the fact that the student essentially pays for his education based upon the economic value that it has to him.

I've been saying for years that we (the taxpayer) should borrow all funding for education, and then let the students pay the debt, in the form of a percent of income as adults (ie Income Tax). That way, those who receive a great deal of economic value from their education pay more for their education, and those who have little economic benefits from education don't have to pay much for it. We actually indirectly more or less do that today, although we never actually define it that way.

There is nothing that pisses me off more than to hear someone say "why should I have to pay for someone elses kids to go to school". In reality, they are paying for the borrowing that existed when they were in school, and "someone elses kids" will have to pay for the borrowing that allowed them to go to school.
 

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I don't see anything in the bill about it being a tax?

Did I miss that?
Gottcha. It's a legal contract, a financing contract for services rendered, and only those who receive the service have to pay for it. Makes sense to me. I'm onboard.
 

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What power would you suggest that the Oregon gov't use to get folks to pay into their "special gov't fund"?
Contract law. Not really any different than any other legally enforcable contract.

The state and the student enter into a legally binding agreement. the state provides a service (educational opportunities), and the student agrees to pay for the service as per the requirements in the contract.
 
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This may also serve as an incentive for state colleges to provide a quality education that will likely result in high paying jobs for their students.
 

Sarcogito

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My initial reaction is this seems like a pretty good, and fair, idea.
 

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Saw this earlier. Already sent it to a few friends I know in my district and one working as a staffer in washington.

I'm gonna try to make a similar initiative a priority to take to this year's General Assembly for Student Senate for California Community Colleges, from which passed resolutions go straight to the governor and has quite some pull with legislators, especially now. Gonna try to feel out CSU and UC to see if they can push it too.
 
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Paschendale

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You know what's an even better idea? Not making everyone start out their working life in debt. Education should be an investment in future generations, not something we hold them on the hook for.
 

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You know what's an even better idea? Not making everyone start out their working life in debt. Education should be an investment in future generations, not something we hold them on the hook for.
...isn't that exactly what this is?
 

Paschendale

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...isn't that exactly what this is?
No, this is making education contingent on going into debt. Which is a stupid idea. It's one of the reasons that my generation is broke. Because we all owe so much money in order to get an education and get a job, and then those jobs pay a pittance and we can't afford our rent. Because the solution isn't to tweak debt. It's to not subject people to debt in order to just get their foot in the door.
 

Fisher

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No, this is making education contingent on going into debt. Which is a stupid idea. It's one of the reasons that my generation is broke. Because we all owe so much money in order to get an education and get a job, and then those jobs pay a pittance and we can't afford our rent. Because the solution isn't to tweak debt. It's to not subject people to debt in order to just get their foot in the door.
Well work harder and save more so your kids won't have to go into debt to get a degree instead of expecting somebody else to have to work harder and pay more taxes to give your child a college education free to them.
 

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No, this is making education contingent on going into debt. Which is a stupid idea. It's one of the reasons that my generation is broke. Because we all owe so much money in order to get an education and get a job, and then those jobs pay a pittance and we can't afford our rent. Because the solution isn't to tweak debt. It's to not subject people to debt in order to just get their foot in the door.
There is no actual particular debt amount that the education is contingent upon. The amount that one has to pay for the services rendered is totally based upon the economic outcome of the education. Hey, no income then no payments, and loads of income result in bigger payments.

I would assume that there wouldn't even be a listing on credit reports, since there was no outright loan, or loan amount, or set amount to repay.

The reality is that if we offer education, someone has to pay, whether it be a private school or a public school. It only makes sense for the people who use services to pay for the services they use. Why should I have to pay for YOUR education?
 

fmw

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No, this is making education contingent on going into debt. Which is a stupid idea. It's one of the reasons that my generation is broke. Because we all owe so much money in order to get an education and get a job, and then those jobs pay a pittance and we can't afford our rent. Because the solution isn't to tweak debt. It's to not subject people to debt in order to just get their foot in the door.
I guess you're right, since money for the government seems to grow on trees.
 

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No, this is making education contingent on going into debt. Which is a stupid idea. It's one of the reasons that my generation is broke. Because we all owe so much money in order to get an education and get a job, and then those jobs pay a pittance and we can't afford our rent. Because the solution isn't to tweak debt. It's to not subject people to debt in order to just get their foot in the door.
Education has been contingent on going into debt for a while. Oregon is trying to make free public tuition in exchange for a low percentage of future income. That's more than tweaking debt, it's more a tax levied on only those the system pays for more than it is debt--traditional debt would be in a fixed amount and schedule payments irrespective of income, which is the entire problem with debt in the first place.
 

gavinfielder

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There is no actual particular debt amount that the education is contingent upon. The amount that one has to pay for the services rendered is totally based upon the economic outcome of the education. Hey, no income then no payments, and loads of income result in bigger payments.

I would assume that there wouldn't even be a listing on credit reports, since there was no outright loan, or loan amount, or set amount to repay.

The reality is that if we offer education, someone has to pay, whether it be a private school or a public school. It only makes sense for the people who use services to pay for the services they use. Why should I have to pay for YOUR education?
Although you still don't seem to acknowledge the possibility of sovereign finance offset by deflationary interest. I'll still push for monetary reform in that direction, but for the moment, we both know you're only correct as a function of legality.
 

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Education has been contingent on going into debt for a while. Oregon is trying to make free public tuition in exchange for a low percentage of future income. That's more than tweaking debt, it's more a tax levied on only those the system pays for more than it is debt--traditional debt would be in a fixed amount and schedule payments irrespective of income, which is the entire problem with debt in the first place.
Exactly. Those who complain that the 47% pay no taxes yet "consume the most government services" should LOVE the idea. It's rare that an idea is embraced by liberals and conservatives alike. Of course I imagine that many conservatives will find something against the idea, just because they want to oppose liberals.
 

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Although you still don't seem to acknowledge the possibility of sovereign finance offset by deflationary interest. I'll still push for monetary reform in that direction, but for the moment, we both know you're only correct as a function of legality.
I didn't understand a word of that. Can you explain in terms that even "the village idiot" can comprehend?
 

Northern Light

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With people's education often running more than $100K, this seems like a plan for long term insolvency. With interest, a 24 year repayment plan will cause the debt holder to pay a lot more than just the cost of their education. If the average person attends college at age 20, they will be approaching mid-life by the time it's repaid. Do we really want individual debt to hang around for so long?

I agree that we need flexible repayment plans, but this seems a bit outrageous. We will still end up loaning more money than can ever be repaid.
 

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I didn't understand a word of that. Can you explain in terms that even "the village idiot" can comprehend?
I'm talking of the basic observations of MMT--the government isn't technically funded by taxes, so your statement that someone has to pay for education is only true in the current legal structure of our monetary system. The concept of pay it forward, pay it back is quite acceptable and immensely preferable over the current system, but I'd still prefer it if were truly free, and there's no real reason it can't be.
 

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I'm talking of the basic observations of MMT--the government isn't technically funded by taxes, so your statement that someone has to pay for education is only true in the current legal structure of our monetary system. The concept of pay it forward, pay it back is quite acceptable and immensely preferable over the current system, but I'd still prefer it if were truly free, and there's no real reason it can't be.
OK, I'm not really disagreeing with that, except that there is only so much money that the guberment can print without causing significant inflation. There are really only three needs for taxation, the first is to control inflation, the second is to disincentivize undesirable behavior, and the third is to reduce income disparity and massive accumulations of wealth in the hands of the few.

Realistically, and from the viewpoint of practicality, the only way that government services could be free is if our economy (productivity) was growing sufficiently fast to justify the amount of money that our government is printing, and if all state and local government services were funded by the federal government. Generally, higher education is mostly funded privately, and by the states, with the exception of federal student loans and grants

So to the extent that the guberment can only fund a portion of it's spending with printed money before having excessive inflation, and with the understanding that the individual states are not monetarily sovereign, state supported institutions have a need to be funded by either taxation or fees for services.
 
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