Yale did something like this in the 70s and finally killed it because of issues with how it was structured. Also it felt really unfair to high wage earners that they were sometimes paying multiples of what their tuition originally was.
Oregon is trying this out now [2].
[1] http://yaledailynews.com/blog/2001/03/27/70s-debt-program-fi...
[2] http://www.salon.com/2015/03/26/two_years_after_signing_of_l...
If you work harder, you will still have more money - that's what % is about.
> Some people (maybe justifiably) feel very uncomfortable with the idea of selling their own future equity.
If they have a problem with that, then they should negate something like "40% for every gross dollar over 1000 per month". You are
> Also it felt really unfair to high wage earners that they were sometimes paying multiples of what their tuition originally was.
That's why I wrote "coworkers", so that it is not a "poor workers against big bank" scheme but "poor workers invest in one of their peer" - this is a lot more at eye level. If the coworkers agree to less - fine. If you are more on the social side: Why not simply invest the, say, 40% into financing the education of the next "poor worker"?
People in other societies do this all the time -- entire families in China, for example, will pay in invest in others' education or pay for them to emigrate to the US, with the understanding that if the person succeeds they will bring over other family members or send back money.
But do coworkers really know and trust each other so well to do this without enforcement mechanisms? Lawyers are extremely expensive, so while you theoretically have recourse to the law, in practice even drafting an airtight contract can easily cost tens of thousands of dollars.
Again there's two problems: cultural (I think to most Americans it's a blow to pride admitting they need help from others), and also enforcing 'percentage of paycheck' contracts is difficult. Just see how much trouble people have enforcing alimony or child support payments, even when the case is 100% legally clear.
Indeed I had this in the back of my mind when I suggested my idea.
> enforcing 'percentage of paycheck' contracts is difficult. Just see how much trouble people have enforcing alimony or child support payments, even when the case is 100% legally clear.
Alimony and child support payments are forced upon them from above - this is nothing that anybody would willingly agree to if he/she could choose freely. On the other hand: Getting financed to learn something new is something people would willingly agree to. And if after that they earn more than before even after "donating" the 40%, they are still better off than before.
Which is basically a description of what happens when countries provide free uni education...
* Student loan is "poor student vs. large bank". My suggestion is "peers finance peer".
* Student loan have to be paid back completely (with interest, of course). In my suggestion you pay back a defined percentage of the gross income for a defined number of years. So the risk that the person will only get a badly paying job is not on the person that is financed, but on the financers. This in particular means that the person taking the "loan" will avoids the risk that he will need many more years than originally anticipated to pay back the "loan".
If these people really have such a large earning potential if they were just learning something new, why not let coworkers get together and finance a fund: The worker (let's call him John Doe) will get his existing income for, say, 2 years, financed by the coworkers together. John Doe on the other hand is of course obligated to learn something new (what exactly is agreed upon beforehand). After these two years for the next, say, five years John Doe has to donate, say, 40% of his gross income back to the coworkers who financed him this opportunity. Both sides should be willing to agree on such a deal: John Doe gets his opportunity to learn new things and (hopefully) get a much better job afterwards and his coworkers will (hopefully) get a lot more money back than they originally invested.