Half a croissant, on a plate, with a sign in front of it saying '50c'
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school equity

a new income model for the education market
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university students are griping about rising tuition costs. here's a solution.

start a specialized high tech / business school. tuition is free - with attending students signing an equity agreement where the institution will receive a small percentage (3%) of their earnings for a set time (10 years).

so. students would be lining up in droves for this "free" school and the school could choose from the best among them - who, it serves to reason, have the best chance of higher earning potential.

enrollment: 10,000 students per year average student income over ten years: $200,000 equity: 3% annual income for school: $6,000,000

Okay, maybe it's not perfect. There would have to be some pretty good investing done with the money. Perhaps they could invest in technologies and companies where the alumni are working, further increasing their income, as well as getting the capital gains from the investment itself.

Gawd, look at some the big bucks some of these kids are making on the internet these days.

pixelswisher, Jun 26 2000

new orphanage http://www.halfbake...dea/New_20Orphanage
very similar idea (parents not schools) [egnor, Jun 26 2000, last modified Oct 04 2004]

The NY TImes on a related subject http://opinionator....utures/?ref=opinion
[theircompetitor, May 31 2011]

[link]






       Not a bad idea. Would never work, they'd put all their efforts to figuring out how to avoid it, but it does sound cool...
StarChaser, Jun 27 2000
  

       This is quite similar to what student loans programs do today- at least in the sense that a student pays off the loan with a percentage of their equity and the repayment process usually takes 10 years or so.   

       I'm curious to know whether 'average student income' over ten years was supposed to be $200,000 a year or $20,000 a year for ten years. If it's $200,000 a year I can't see more than a handful of grads getting that kind of money in their first ten years- definitely not 10,000 of them.   

       If it's based on $20,000 a year (more realistic), there's a problem: $6M won't pay for even a third of the expenses of the school's expenses- probably much less, in fact. There would have to be some form of corporate sponsorship to make up the shortfall, and it's doubtful that such sponsorship would amount to more than a few million more.   

       Great idea, but the money aspect needs a lot of work.
BigThor, Sep 02 2000
  

       It's sharecropping for our times.   

       Hey, it would be kind of a lean first nine years, wouldn't it? What with only 10%, 20%, 30%... of your expected pool of alumni sendin' in the cheques. And of course the few who make it big will be the ones who will be able to afford the legal help to deny you the payments by fighting goons with goons.   

       Maybe there should be a mechanism for prospective students to sell shares in themselves on the open market. Investors could pay their tuition -- to any school -- in exchange for dividends amounting to a few percent of earnings for a specified period. Might be more attractive for some than enserfment by a bank.
Monkfish, Sep 02 2000
  

       Like VC firms, the school would probably get most of its money from a few "stars". A single Bill Gates (or even a Larry Ellison) could fund the school for perpetuity.   

       (Um, too bad Bill Gates dropped out. What would happen in that case? Contract void, or pro-rated?)
egnor, Sep 02 2000
  

       I don't like the idea. Teachers need to be paid a decent amount and respected. The respect part is important. Trying to provide a purely market-based solution is crude. Let's seperate the Corporate World from the Academic World, please. The former, though it accomplishes much, is not famed for its great contributions to culture and a life of the mind.
Vance, Jan 29 2001
  

       vance: At present teachers are seperated from the corporate world, and I would like to know where this decent pay and respect is. A little bit of the corporate attitude might be nice. However, if we're taking a percentage of the students wages I want to teach network administration. Please please can I.
buckrogers, Jan 29 2001
  

       Right, let's KEEP them seperate. As for where is the decent pay? the respect? well, we need to provide those things. You think teachers would be well-paid and respected under a corporate system. Oh my no way. Ask the doctors who work for HMOs....
Vance, Jan 30 2001
  

       Sounds reminiscent of something Mike Dukakis was proposing back in 1988.
LoriZ, Aug 25 2001
  

       Well, what a good idea.   

       First off, this would have the advantage of eliminating all those wishy-washy airy-fairy fields of study which are unprofitable in a personal, immediate financial way. Ancient Greek, botany, Egyptology, politics, archaeology, history, philosophy, biology, chemistry, theoretical physics, mathematics, mediaeval literature... what kind of poncey tosser would study those anyway? Let alone expect his or her government to pay for their education when there's no real prospect of making a good return. Much better to stick to worthwhile subjects like law*, dermatology, banking, orthodontics and...well, those four are enough.   

       (There will be some unfortunate losses, of course. For instance, I suspect that most engineers don't earn enough in the first 10 years post-grad to make them worth farming. But, tough decisions are there to be made, and we'll be all the more respected for making them. We can always import engineers from China if we need them.)   

       Second, it would lead to a revision of the remaining disciplines (law, dermatology, banking and orthodontics) to focus on the core essentials which will produce the greatest income in the shortest possible time. This will greatly streamline university courses, by eliminating any non- applied aspects of these disciplines and going straight for the money. Focus - that's what it's about.   

       We ought also to consider (certainly in the UK, where education has come to be seen as a right by some sectors of society) extending this process into earlier eduction. What is the point, I ask you, of spending thousands on teaching some idiot child how to read, write and do arithmetic if all he wants to do is become a painter? These non-profit students need to be identified early so that we can manage their expectations properly.   

       The problem is that many people seem to think we're living in some sort of Golden Age, where the Government's job is to provide education effectively for free, even to people who don't pay their fair share.   

       We need to be much more realistic. Yes, we could afford to educate people for free fifty, forty, thirty years ago - but we are so much poorer now. We have made so much progress in the last few decades that we cannot possibly afford to simply educate people willy nilly, without some sort of guaranteed return. Society needs to march on toward that great day when everything is paid for and not a syllable of education goes unbilled.   

       *The execrable Stephen Fry, one of those poncey tossers who went to Cambridge and completely failed to yield a financial return in his first post- graduate decade, relayed the following joke on the subject of lawyers: "What do sperm and lawyers have in common? Each has a one in fifty- thousand chance of becoming a human being." We need to stamp out this sort of thing.
MaxwellBuchanan, May 31 2011
  

       //manage their expectations properly// It was funny untill that point, and then I lost track of the boundary between satire and reality (which is a characteristic of the best satire).
mouseposture, Jun 01 2011
  
      
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