Christie: issue shares to pay for your degree

Sydde

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Original poster
Aug 17, 2009
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This strikes me as a rather disturbing idea. During a speech in Iowa covering student debt, school choice and teacher accountability, Gov. Chris Christie put forth a rather, um, unique idea
… income share agreements, which allow students to essentially issue stock in themselves. It allows people to invest in college students, or to “own human capital contracts,” which means that an investor could pay a portion of the student’s tuition to attend college in exchange for that student giving the investor a certain percentage of their income for so many years.
I have seen it suggested that this could result in something akin to indentured servitude. Howsoever you look at it, the implementation seems like it would be problematic. To me it looks like someone using their imagination in an imaginative way. I cannot see such a concept solving any of our education woes or reining in the cost of higher learning, all I can see is a sort of fractional slave trade on the stock exchange.
 

SLC Flyfishing

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Nov 19, 2007
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This strikes me as a rather disturbing idea. During a speech in Iowa covering student debt, school choice and teacher accountability, Gov. Chris Christie put forth a rather, um, unique idea
… income share agreements, which allow students to essentially issue stock in themselves. It allows people to invest in college students, or to “own human capital contracts,” which means that an investor could pay a portion of the student’s tuition to attend college in exchange for that student giving the investor a certain percentage of their income for so many years.
I have seen it suggested that this could result in something akin to indentured servitude. Howsoever you look at it, the implementation seems like it would be problematic. To me it looks like someone using their imagination in an imaginative way. I cannot see such a concept solving any of our education woes or reining in the cost of higher learning, all I can see is a sort of fractional slave trade on the stock exchange.
Yeah, slave to an investor or slave to the govt. either way, still a slave.
 

VulchR

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Jun 8, 2009
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Y'all forgot that the current system enslaves people to banks. Peer-to-peer funding of college expenses might not be such a bad idea (indeed, no doubt a few parents would for this for their kids). It just depends on the terms, interest, etc.
 

vrDrew

macrumors 65816
Jan 31, 2010
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Do what I did, join the Army LRP. That's how I paid offf my college loans in the 90's. :D
Not to in any way disparage your, or any other person's military service, but from a purely economic-efficiency standpoint, that is not a very good solution. At least not for the majority of people.

To begin with, each year over 4 million students graduate high school, with roughly half opting for some form of higher education. That far exceeds the US military's requirements for recruitment, at either the enlisted or officer level.

On a purely individual basis, its a suboptimal solution too. You have to spend several years doing something that is not your ultimate career goal. It takes a minimum of seven years post-secondary education to become a lawyer; eleven to become a doctor. Spending an additional three or four years fixing airplanes or firing howitzers merely extends that even further out.

Its also, from a Government spending perspective, not terribly efficient. In addition to paying for the education, the military has to spend hundreds of thousands of dollars paying, housing, and training an individual whose career prospects with the military are limited.

Gov. Christie calls for individuals to issue stock in their future earnings to pay for higher education. That essentially is what Government support for higher education is for. The Government reaping its repayment in the form of higher taxes paid by individuals. Its an economic model that worked spectacularly well in the past: The postwar GI Bill gave nearly every WWII veteran the chance at a higher education. With the result America got a generation of doctors, lawyers, scientists, engineers, and businesspeople who quickly built the wealthiest mass society in human history. They also did it at a time when the top marginal Federal Tax rate was more than 70%. But thats a discussion for another day.
 

Robisan

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Jan 19, 2014
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Even taken at face value, this is just plainly stupid. If you're going to securitize people, debt is safer then equity. If the entity (person) goes bankrupt, debt/bond holders get paid first and stock holders last. Surely former US Attorney Christie knows this most basic element of securities law and here he's really just bloviating out of his ass.
 
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SLC Flyfishing

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Even taken at face value, this is just plainly stupid. If you're going to securitize people, debt is safer then equity. If the entity (person) goes bankrupt, debt/bond holders get paid first and stock holders last. Surely former US Attorney Christie knows this most basic element of securities law and here he's really just bloviating out of his ass.
And if the person owes money to the "stock holder" and not to debt/bond holders? I think the whole point is to eliminate student loan debt, and turn it into an investment opportunity. You're point assumes there are student loans being take. Out in addition to the student "selling stock" in their future career prospects.

While I don't think this plan would work in general, it's clear to me that you're just brushing it off because Christie has an R next to his name.
 

Praxis91

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Mar 15, 2011
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Too many people go to college. The world needs ditch diggers too. I laugh at anyone majoring in garbage such as art, gender studies, and sociology. If I see anything like that on a resume, I go NEXT and have a good chuckle.
 

jkcerda

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Jun 10, 2013
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did DD watch Northern exposure while killing a few dozen donuts?

https://en.wikipedia.org/wiki/Northern_Exposure
Premise[edit]
The show was originally centered on Joel Fleischman (Rob Morrow), a newly minted physician from New York City. In order to pay for medical school, Fleischman had enrolled in a state run scholarship program which paid for his costs in exchange for a few years service at a hospital in Anchorage, Alaska. Because the hospital was overstaffed he was instead re-located to treat an underserved community in the (fictional) rural town of Cicely, where no medical clinic existed before his arrival. Fleischman resisted, claiming it to be illegal. However the fine print of his contract supported such a placement. Hilarity ensues as the 'big city' young man learns to live and work in an environment completely foreign to him
 

zin

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May 5, 2010
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United Kingdom
I'm not entirely against this proposal, provided the repayment would essentially be treated as a tax and so the investor cannot simply repossess property in order to get his or her money back.

In the UK, the Government and thus the UK taxpayer is the "investor" in the future workforce. But the Government does not have the power to get rid of less than useful degrees, and there are very many in UK universities, therefore we end up with a situation where the "investor" in the future workforce, the UK taxpayer, is being short-changed because the output of intellectuals is failing to meet the demands of the industries of today (and tomorrow).

Of course, the other answer is for the Government to put its foot down and say, "The People will not fund art, music, marketing, golf management, media studies, et al degrees".

That is not to say creative industries do not contribute to society. They of course do, but a degree is not what should be offered in those areas.
 

0007776

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Even taken at face value, this is just plainly stupid. If you're going to securitize people, debt is safer then equity. If the entity (person) goes bankrupt, debt/bond holders get paid first and stock holders last. Surely former US Attorney Christie knows this most basic element of securities law and here he's really just bloviating out of his ass.
I guess the one way this could be better than student loans is if going bankrupt means that the investors don't get anything back and the debt goes away rather than being like student loans where nothing will get you out of them. Still seems like a bad idea though.
 

VulchR

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Jun 8, 2009
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This is investment in people. How is that so bad? We have an older generation that has most of the money, but will be coming toward the end of their life during which they will need income to support themselves when they cannot work. We have younger people who need education. The two needs seem to be complementary. If this was done properly, so that peers rather than robber barons are the investors, and the terms are fair, I do not see a problem with this. Already in my old university the students post a description of their final year research project in a way very similar to Kickstarter. Alumni can choose to donate to the listed projects or not. It works well and keeps the students connected to the society that is paying the cost of their education.
 

iConnected

macrumors 6502a
Feb 17, 2011
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... Of course, the other answer is for the Government to put its foot down and say, "The People will not fund art, music, marketing, golf management, media studies, et al degrees". That is not to say creative industries do not contribute to society. They of course do, but a degree is not what should be offered in those areas.
I'm interested to know why you include marketing in this group.

Marketing plays a key role in creating economic value. You'll find marketing professionals at the highest levels within most successful businesses.
 
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Ledgem

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Jan 18, 2008
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This is investment in people. How is that so bad? We have an older generation that has most of the money, but will be coming toward the end of their life during which they will need income to support themselves when they cannot work. We have younger people who need education. The two needs seem to be complementary. If this was done properly, so that peers rather than robber barons are the investors, and the terms are fair, I do not see a problem with this.
The thing is, it already happens through the government. Working people pay taxes that contribute to the government's ability to provide educational loans. When students graduate and get a job, some of their taxes go into social security, which provides an income to those who are of retirement age. If you want to reduce student debt, then make it so that the government's loans have a 0% interest rate. If you want to eliminate it entirely, stop making loans at all and just do it like they do in certain parts of Europe, where university-level education is free.

What is the benefit of making the system private and between other members of society, as opposed to doing it through the government? I suppose there's a benefit if you're a lawyer, as there would be plenty of opportunity for more legal disputes. Aside from that, I don't see how it would be better.
 

NT1440

macrumors G5
May 18, 2008
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So...Christie wants to go back to serfdom in the educational field. We already do this economically, but he'd rather go back even further.

WTF is wrong with this country? We are absurdly wealthy, can spend endlessly on war, but basic societal needs in the 21st century like education and healthcare....meh.
 

Praxis91

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Mar 15, 2011
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I agree that we spend too much on our foreign meddling, but we spend less than 20% on our military. 50% alone goes to entitlements such as SS and Medicare.

We need to stop being the world's police. We are subsidizing the EU's defense. Let them handle it themselves or pay us for it handsomely.

Higher education is not a right, nor should it be. Not everyone should go to college. Why are public schools no longer teaching "shop" and "home ec?" Hell, they can't even teach basic finance.

People have become such dependent wussies.
 
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Praxis91

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Mar 15, 2011
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No one forces you to get a student loan. Idiot average students think they have to go to that 4 year school and idiot parents will co-sign that insane loan.

If you really want to get a degree (as in being MARKETABLE eventually for a good job) then go to a community college for your associate's (dirt cheap), get some job experience, and then finish your degree. Many companies will reimburse you for your troubles.

My employer paid for my Master's and they will pay for my PhD if I decide to further my education.
 

sim667

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Dec 7, 2010
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I don’t think he murdered anything in the 90’s other than plastic
The US Army were involved in both the Gulf war and the Afghanistan Civil War were they not?

Besides its not a question of whether you do or don't..... Its a question of whether you're prepared to take life for money.
 

lowendlinux

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Sep 24, 2014
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The US Army were involved in both the Gulf war and the Afghanistan Civil War were they not?

Besides its not a question of whether you do or don't..... Its a question of whether you're prepared to take life for money.
I understood your point I ignored it.

Yes they were involved in both, the first to a limited extend and the latter combat operations in DS were fairly specific not only because the Iraqi ground forces in general didn’t fight but combat ops at that time were relegated to specific jobs.
 
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