Game On, Again, for Gainful Employment

I like it. If graduates of your program are not earning more than (roughly) $25,000 a year which is the financial standard and equivalent to someone who never attended college in the first place, you have utterly failed in your mission. For more info on the debt-to-earning ratio (D/E):

If you graduate with a Bachelor's degree and $30,000 in student loan debt (roughly the average), that means that your payments at 6.8% and a 10-year payoff term would be around $288 a month. In order to be under the 8% total income threshold they need to be earning $3600 a month or $43,200. That seems reasonable. If your graduates are making $26,000 a year (just above the financial cutoff) that means you'd better be careful to ensure their average debt is below $173 a month. Using the same 6.8%/10 year terms, that would be student loan debt of around $15K.

 

In UK they have a fairly simple - and I think reasonable plan. There's an earnings floor limit, below which no payment is required. It's fairly low - sort of a basic survival amount. Beyond that exemption, the student loan payment is something like 9% of earnings above the floor limit. Flat rate.

I believe ALL employees who have student loans are required to notify the appropriate Government department when they start work / change employers. The Government then sends the employer notice to remit the appropriate amount through payroll deduction. It works like remitting taxes. Done the same way for everyone. Seems to work.

 

Canada's student loan repayment assistance is similar, I needed it once when I'd lost my job and couldn't make even modest payments. Below a certain amount, your payment is $0 and the government makes the payments. Once you hit a certain amount, the payment is $0 but the government doesn't cover the payments so your loan is frozen. It doesn't go up but it doesn't go down either. Then when you cross a threshold, you have to start making payments, with the government covering the interest until your income is high enough that you are making full payments plus interest.

Unfortunately that assistance is both time limited and you must apply for it, so many people don't know it exists until their loans are in default and then they don't get the full benefit.

 

An individual's earnings cannot be used as an accurate measure of a college or university.

First, there are too many other variables that affect those earnings. Second, the owner of the outcome is responsible. They choose. Not everyone choses to emphasize salary as an outcome. And not everyone is good at the process of making money.

Inputs --> Processes --> Outputs --> Outcomes

A university education or a technical school training is an input, not an output or outcome. What a person does with that education or training is at least as important as the learning itself.

Measuring the wrong thing is a common mistake. But it IS a mistake.

There are ways to measure the quality of this input. That's what we use accreditation for. And even that is difficult because what a student learns in the process can vary widely.

 

If schools are accepting students who don't want or cannot earn enough to pay the taxpayers back, that is a problem that needs fixed somewhere in the pipeline. The government can't stop the school from offering programs, but they can refuse to pay for them.

I suspect the group of people choosing to live in poverty is low. There are obviously issues with certain professions that are low paying and people with circumstances that don't allow thm to work and we do need to take those things into account.