[manfredo]

The attempt to portray income share agreements as bad is very large stretch:

> These ISAs are the bedrock of Lambda’s program. They allow the school to market itself as an “accessible” computer science education. But critics, like Sen. Elizabeth Warren (D-MA), have warned that ISAs carry many of the pitfalls of traditional private student loans, “with the added danger of deceptive rhetoric and marketing that obscure their true nature.”

Yeah, except for one massive pitfall that student loans have and ISAs don't: With ISAs you only start to pay once you actually start making money whereas student loans saddle graduates with debt regardless of their job prospects. If the graduates of the Lambda school don't land jobs then the school doesn't get paid. With traditional student loans, the school gets paid even if their graduates are unemployed.

ISAs seem strictly better to me. It shifts the risk burden onto the school, and creates monetary incentives to improve the job prospects of graduates. By comparison, traditional loans put the risk burden on the student and because the university is paid upfront there is not as much incentive to better the job prospects of graduates.

[dragonwriter]

> Yeah, except for one massive pitfall that student loans have and ISAs don't: With ISAs you only start to pay once you actually start making money

That's not that different from federal student loans, since those all have income-contingent repayment plans (as well as pay as you earn, revised pay as you earn, and income-based, which are generally similar but have different repayment formulas) available. It mainly differs in the reduced flexibility with the ISA.

> If the graduates of the Lambda school don't land jobs then the school doesn't get paid.

ISAs are marketable assets and can be sold even while the student is still in the program, and the school gets paid by selling the asset. The new holder of the asset doesn't get paid if the student doesn't make money.

[untog]

"strictly better" and "carry many of the pitfalls of traditional private student loans" aren't contradictory.

ISAs can be, and are, better than student loans. But they're not a universal good, as demonstrated in this article: if you are on the receiving end of a crap course that doesn't help you get a job is it really good that you'll have to pay for it (when you get a well paying job from entirely unconnected means)?

[manfredo]

> if you are on the receiving end of a crap course that doesn't help you get a job is it really good that you'll have to pay for it (when you get a well paying job from entirely unconnected means)?

When the alternative is:

> if you are on the receiving end of a crap course that doesn't help you get a job is it really good that you'll have to pay for it (with interest, even if you're still unemployed after taking the course)?

Yeah, the former is really good.

Sure, it'd be better if the courses were free. But are you going to spend two years teaching computer science without pay? I'm not going to, and I'm going to go out on a limb and guess that most people won't either.

[untog]

> When the alternative is

Your supposition is that there are two options for everyone:

a) go deep into student debt

b) go deep into ISA debt

and no others. I contend that isn't the case. You could do neither. When you're in danger of getting into serious debt via an ISA to a company that doesn't seem to be competently running courses that will lead to employment it's only sensible to question whether it's worth signing up in the first place.

[manfredo]

There's no "ISA debt". There's no interest racking up. You may not even pay anything if you don't get a well paying job.

Sure, an ISA from a bad program is not good. But at least you're not paying unless you get a well compensated job.

[untog]

> There's no "ISA debt"

?!?! Of course there is! What are you repaying when you get a high paying job?

[manfredo]

You're paying a percentage of your income, if you're making above a threshold. This is in comparison to debt which has interest that makes the debt increase over time until paid off - regardless of whether you are employed in a well paying job or even whether you're employed at all.

Yes, under both system money is being paid back to someone. But crucially, there's no interest with an ISA. And furthermore, no money is taken until people get a job that pays a certain amount.