| I don't see how this can make financial sense. 3% for 20 years totals 60% of one year's salary (or the average salary over your first 20 years in career). Average salary is $48k, so that's paying back $29k. ... however it's actually even worse than this meager sum: - Salary increases over your lifetime, and the highest earning decades are 40s and 50s, so I the average salary over the first two decades is probably lower than $48k. Maybe this is mitigated by restricting to only people who at least attempt college? - Oregon has a slightly lower-than-average income. - People are more likely to sign up for this program the less they think they'll earn. - Once someone has graduated, they are not incentivized quite as strongly to pursue high salary positions. - Some loss due to deaths, defaults, emigration, black market off-the-books income, etc. - Depending on how it's set up, this may cut into the tax revenue to the state. - It doesn't take into account inflation or the time value of money. I understand the point of the program is a social benefit to the state, but I think it's useful to examine the reasonableness of the proposition in a market context. If someone offered you a bond to take the other side of this deal, how much would you pay for 3% of the first 2 decades of income of a hypothetical freshman entering college this year? What about a 1/1000 share of a portfolio of a thousand freshman? |