How to Build an Income Sharing Agreement Product (opens in new tab)

Which leads us back closer to the ugly reality of people owning other people. ISA used to stand for Indentured Servitude Agreement.

(Not saying Incoming Sharing Agreements's are bad, we just have to be careful...)

This article doesn't really go into it, but the impetus from what I gather is to try to find a viable alternative to the current system that balances practical realities with various ideals or goals.

Historically, college was an upper class pursuit because the upper classes could afford it. You introduce student loans and then instruments to make them more easily accessible to anyone, you end up with the current debacle.

Part of the cause of the current debacle is the fact that it takes more than the right degree to establish a sufficient income to make traditional student loans make sense. You also need job hunting skills, availability of good paying jobs and a personal situation conducive to working full-time. This means no health crises, unexpected pregnancies or other family problems imposing on your time.

What we've learned is that the bet involved in the current student loan process is a bet that still leaves a lot of lower class people in a situation where college is a bad bet that may just deepen their financial problems and de facto keep them trapped in poverty.

I don't know if this solution is the right solution, but I do think the goals and ideas driving these experiments are healthy impetuses. We need to continue to try to find societal patterns and practices that help lower income people have the opportunity to rise. It's better for society overall.

The tendency for the principle of "them that has, gets" to deepen class divides is one that needs constant push back. Otherwise, it foments bloody revolution.

We already have memes like "Eat the rich" which point to deep resentment and bitterness of the "peasant" classes. You would have to be a fool to think that's not anything to be concerned about.

Bowie Bonds for all:

https://en.wikipedia.org/wiki/Celebrity_bond

Be careful what you wish for.

Shares of this nature would be regulated as securities. Which would bring a great many uncomfortable requirements to the table.

Just as a for instance, I'll just point out that corporations have Boards of Directors and shareholder meetings. Both of which potentially determine and direct any future actions the corporation is allowed to take.

I think this is how the social media influencer market works.

Perhaps it is. However, interestingly to note, most religions, like traditional Christianity and Islam, would actually be okay with an income sharing system (especially if the share was redeemable and payments set up to accomplish this) as opposed to an interest based system. It is unclear that an income sharing system is any morally worse than an interest bearing one, and there are reasons to think it is better.

A world where algorithms trash your CV if it doesn't have the phrase "B.A." or "B.S,", and where the cost of that keyword is an irrevocable tithe on 10% of your human output.

My lord, people, this might be a bad idea.

At first you mention how higher education doesn't get you a good job anymore, but then you mention support for a candidate who will make college free. Don't you see the contradiction here? The reason college graduates have difficulty finding good jobs compared to the past is because so many people have a degree. Even if you forgive all of the student loans and make college free, people still won't find jobs based on college. College might not even get you anywhere because it'll become a default requirement for every job. There will be some other criteria used instead and somebody's probably going to make money off of that too.

There just aren't enough jobs that require the qualifications of English literature majors or similar.

"The problem isn't that an API doesn't exist to automatically debit 10% from the people you own, the problem is an education doesn't get you a job anymore, much less a high paying job."

In classical education if you don't get a high paying job it's your problem not the university's because they've already been paid. The whole idea behind this change is to shift some of that risk of un/underemployment to the university. So if the university isn't able to get you the high paying job they promised that's their problem too(b/c they don't get paid).

>The problem isn't that an API doesn't exist to automatically debit 10% from the people you own

Something's just really wrong about that statement. It saddens me. Didn't we fight a war to put an end to stuff like this?

Also, a president is not going to wave a magic wand and fix this system. If you want to support that candidate, by all means do so, it's one of the habits of healthy hearts and minds in a democracy. Just realize going in what's actually possible and what's political marketing. Fixing this is going to take a lot more work on everyone's part than simply casting a vote.

Finally, the wealthy should pay more. No argument from me on that one. Having said that, there is a game theoretical optimum on how much you should tax each person in a society. We don't want to get carried away with taxing anyone for political reasons. Liberals do that with anything that will disproportionately stick it to bankers, and conservatives have done that with anything that will disproportionately stick it to blacks. (The recent Reductio Ad Absurdum of conservatives demanding that college athletes pay taxes on scholarships is an example I'm guessing you might appreciate of how political targeting can get just a bit ridiculous.)

I believe the idea behind "income sharing" is that there is no demand for payment when there is not sufficient income. This makes it hard to qualify for bankruptcy, which is based on your ability to meet monthly debt obligations.

Clearly default and a lifetime of ruined credit is the better option.

You incentivize this by attacking the problem directly - which is to realize that the cost of education is not rising due to scarcity, its rising because of misguided administrative practices and budget allocations.

Quality educational materials are certainly not more scarce today than they were 50 years ago, or somehow astronomically more expensive today.

Quality educators are not astronomically expensive and costing students more. In fact, educators are being chased from the classroom because we treat professors and teachers as a cost center and have systematically eliminated long-term confidence in career stability by replacing career professors with graduate students and adjuncts.

Your comment reminded me of this article from a few weeks back: https://www.nytimes.com/2019/09/20/business/liberal-arts-ste...

STEM careers are and likely always will be a solid choice. But liberal arts aren't as bad as pop culture would make them out to be.

basic supply demand. Less supply, more demand = higher salary = more students. There is obv equilibrium point.

I think the tech boom/talent shortage has a lot to do with it. It seems fairly unprecedented that a smart person with no education can take a ~1 year course, then reliably expect to be making a significantly above average salary immediately, and a six figure salary within a few years.

I'm wondering why it's just now they've become popular. Maybe they just needed a successful initial usecase and found it in Lambda School (unless I'm missing another successful ISA use case before Lambda School).

Regardless, it's great to see Modern Treasury build a solution to make ISAs simpler to implement.

Or setup a contracting corporation, accumulate your consulting income in the corporation. Have a home office. Pay yourself as little as possible to cover living expenses during the 5 year period and accumulate all the capital in your corporation. Pay your 10% on that small amount. Cash out the corporation afterwards, possibly over several years to lower tax burden.

Sure it's vaguely does but most fields people would go into for college degrees don't generally do work undocumented. Also the loan company has an opposite incentive to track down anyone doing that and unlike the IRS they're not hamstrung by Congressional attempts to bleed them dry.

Isn't that the whole point? The very successful ISA participants are subsidizing the less successful ISA participants. An ISA with an income cap is just a loan with a lot more downside for the lender.