[kevintxwu]

Yea, we definitely have to be sensitive about offering financing options directly to students.

One of the ways we handle this now is we actually ask the students to consult their family before signing anything. We also allow the students to still drop out of the program at no liability within the first two weeks.

The problem with upfront payment is that we are no longer held accountable by aligned incentives. The most predatory thing about student loans is that you still owe the same amount of money regardless of your outcome. I think our income share agreement is designed to be much safer since in almost every case where you pay anything you are also capable of paying it.

For students in exceptional situations, we'll even waive their dues or retro-actively offer financial aid since we didn't design the program to be a future burden. The way we see it, helping out a student in need in any way pays back tenfold in terms of reputation later.

[jabv]

As an aside, I don't think "the most predatory thing" about student loans is the fixed cost regardless of profit. The same could be said of any business or real estate loan. The most predatory thing about student loans is that there's barely any rational qualification of the loan recipient.

[kevintxwu]

Yea, you're right. I would say it's in part the disparity between the scale of the fixed cost and the amount of qualification that is predatory.

As in, if it was a loan for only $1000, it's certainly more ok to do less qualification. Versus if you were saddling a student with a loan of $40,000, you should probably be very careful.