A Perverse Idea Whose Time Has Definitely Not Come

I think I’ve written before about how profoundly stupid this is. But I may have neglected to mention that it is also perverse.

And I was shocked to see a Brookings Institute “report” seemingly endorsing it.

“It” is Income-Sharing Agreements (aka “indentured servitude”), currently being promoted by former Indiana Governor and current Purdue President Mitch Daniels as a private-sector remedy for the growing burden of student loan debt.

Income Share Agreements are an innovative tool that will, as I have argued elsewhere, allow students to finance college by selling “shares” in their future earnings. Graduates pay back in proportion to the pecuniary value they get from their degree. If the degree proves worthless, the students will pay little or nothing. If the degree is immensely valuable, then the students will pay back a lot. Either way, the payments are, by construction, affordable.

This is a great idea, if your definition of “education” is job training.

How many “investors” are going to finance that philosophy major’s education? How about the student pursuing a degree in English literature? Or romance languages? or basic scientific research that doesn’t promise a quick payoff, as opposed to training in   technologies that generate prompt turnarounds to satisfy consumerism?

Even for students in more “promising” fields, the plan doesn’t eliminate debt; it simply changes the identity of the creditor and the schedule of repayment.

Ultimately, this is one more step on the road to devaluing scholarly inquiry–one more bit of evidence (as if the current crop of Republican Presidential candidates wasn’t evidence enough) of the triumph of American anti-intellectualism.

If it can’t be monetized, it evidently isn’t worth knowing.


  1. Daniels has proven his intent to covertly deny higher education in vital areas necessary to improve conditions locally and nationally; mathematics and science primarily. Pence and Ballard have carried on where Daniels left off; the education system state-wide has become big business, along with medical care through the state system which prevents most applicants from being allowed to apply directly to ACA.

    The only course of action available to qualified higher education students is the current years of thousands in indebtedness for student loans. Trade schools are important and maybe – maybe – Income Sharing Agreements are a viable solution for those seeking a trade in some areas. Daniels’ proposed system lowers the value of Purdue and other state universities who have joined the money-makers, seeking only profits while pandering to student loan providers and turning students into indentured servants to the system. It is a continuation of denying education to many through their Charter Schools and Voucher Students. It also appears to me to be the same “snake oil salesmen” system you referred to regarding Ben Carson.

  2. I suggested the other day that the real problem is that we are trying to educate for the 21st century from the 19th. Our basic concept of education is the same now as it was for my parents if not grandparents. I can’t believe that our education paradigms from long ago are the only possible ways to educate, that there aren’t profoundly better ways.

  3. If the Brookings Institute can endorse a system like this do you think we could ask them to do the same with Corporations who accept government ‘welfare’ ? i.e. could we ask our corporate brethren to pay taxes to those of us who gave them their ‘education’ in this world?
    As we know the answer to that question, Brookings would never ask Corporations to pay their fair share, we have peeled back the reality of this suggestion: it is good only for those masses who aren’t smart enough to understand the parallel.
    Let’s start with income sharing agreements with military and industrial corporations who have gotten government subsidies.

  4. I read the paper, too. It’s more like an article, but even a number of the commenters had trouble with it. And those folks are probably in the same ideological camp.

    The article probably reflects a situation where a few people who agreed with one another talked about the idea and, as the literature about such events suggests, the final product was more radical than any one of them had individually, and not well thought-out. It sorely needed a few people who thought differently and recognized how flawed the scheme is.

    I hope that, as people talk about it, this idea will be seen as perverse as it is. One of the commenters suggested that we “…suck it up as a nation. Remove tuition and book costs from qualified students….” Apparently, Australia has a national student loan program where they pay back the government loan in proportion to what their earning are after college, but that has some problems, too.

  5. When Mitch Daniels first proposed this college financing option I was beyond shocked. As you said, it is indentured servitude. We should never resort to funding a college education in this manner. Students would essentially be owned by the investors like a “piece of property or stock”.

    You are exactly right – it is only about job training by colleges. My belief is if the corporate world and employers are only concerned about job training, then those students would be better served by attending a 1-2 year specifically focused program that would not incur the large expense and debt of a 4 year degree.

    We should not be telling high school students that everyone needs to have a college degree to get a good job. That has proven to be a huge burden on too many students that could not find gainful employment. We really do need to get back to vocational training for many of the jobs out there that require only technical training and promote college attendence only for the students that have the potential of utilizing their degree for a future that isn’t just technical in nature.

  6. Sheila, I agree with you wholeheartedly. The idea that “the market” should drive what students learn is repellent to me. If we don’t have the arts and humanities (think about that word), we don’t advance as humans. The Founding Fathers were all well versed in these area-that was the mark of an educated man. The 21st century is not an excuse to teach and learn a wide spectrum of subjects.

  7. While I worked full time at an international company located in northern Indiana, I used their education program so that I could finish my bachelor degree. Before I was reimbursed for tuition and books, I had to sign a document that after graduating (or finishing the course) that I would continue working for them for at least one year. If they paid for my education and l left that employment, I would have to pay back every red cent. Same same?

    It was difficult to do this because I needed 2 yrs of classes in order to finish the bachelor program. I worked an average of 45-50 hrs a week, on-call 24/7/365 and had homework/papers that completely consumed all of my free time. I also owned my own home, had to continue to do laundry and cook for myself and barely had time on holidays to spend with family because of the projects I did over the holidays when nobody else was working. I had to migrate email boxes from one server to new servers which took 10 days to complete (for 17,000 employees with email). I tried to convince my cousins’ son not to quit college and do it like I did because it’s twice as hard on the human body to accomplish this, let alone living alone with no help from anyone.

    I’m very proud I survived but if I could do it all over again…I don’t know…if I could do it. That agreement forced me to stay with the employer even though when I completed it (with two male colleagues), the guys got promoted for their new credentials, but I didn’t. It wasn’t grades either. I had an overall score of 3.85 out of 4. Just sharing my experience.

  8. It is time that we all have the courage to be honest. The GOP, or whatever demonic spirit now infests that party, wants to destroy the education of Americans because it stands in the way of their total power. They want you to be dumb. They want your kids to be dumber. And their schemes and “reforms” for education are designed to do exactly that. We no longer have loyal opponents. They seek to destroy the American experiment in liberty and freedom.

  9. And by the way, the only way to beat a bully is to punch him in the nose. The only way to defeat violence is with violence, even if it is smarter, judo-style action. And the only way to destroy fascism is through force. We have to be ready to stand for ourselves, because the time may come when they come very close to using our democratic institutions to destroy democracy itself. We are civilized people, but like our founding fathers we should be prepared to become barbarians to defeat barbarism.

  10. Over It,

    It’s been time for too longer a time. However, violence will only bring a response of more violence.

    You have to find a better way to respond.

    You have to speak to power, but to the real power that controls and it’s deeper than you think–deeper than the Koch Brothers.

    Milton Mayer, a Quaker, is credited with the words: “Speak Truth to Power.” He was a partner of my deceased partner, Professor Harvey Wheeler.

    He meant speaking to the deepest level of “Elite Deviance.” To do anything less is only kidding ourselves. Things will only become worse and worse. Wasn’t he right? Isn’t that continuing to happen?

  11. Anthony, great comment there is no chance Mitch, Pence, Hogsett, or Brewer would ever ask our local Welfare Queens the Pacers and Colts to pay out of their own pockets for the stadiums the tax payers have built and maintain for them.

    Bernie Sanders has proposed a “free” college at State Schools. >>> From the BBC – While the cost of college education in the US has reached record highs, Germany has abandoned tuition fees altogether for German and international students alike. An increasing number of Americans are taking advantage and saving tens of thousands of dollars to get their degrees.

    Each semester, Hunter pays a fee of €111 ($120) to the Technical University of Munich (TUM), one of the most highly regarded universities in Europe, to get his degree in physics.

    Included in that fee is a public transportation ticket that enables Hunter to travel freely around Munich. Health insurance for students in Germany is €80 ($87) a month, much less than what Amy (Hunter’s mother) would have had to pay in the US to add him to her plan.

    The USA has become a country where good healthcare and an education is available if and only if, you can afford it and potentially risk bankruptcy or crushing debt.

    Perhaps reading The Canterbury Tales, or the Song of Roland did not directly assist me in my job in the financial world, but you learned not just the literature but also the critical thinking and an appreciation for those people who pluck words from their brains to entertain you and educate you.

  12. As a former college and university educator, the debt of my many students over the years must be somewhere in the millions. To think that the Brookings Institute would pander to that kind of debt payoff is abhorrent to me.

    I was not a fan of my step-father, but he did pay for my education while I was earning the Bachelors, and I shall be eternally grateful to him for that one act of kindness on his part. My husband and I paid off our Masters and his PhD, but I don’t remember paying on either of them for nearly as long a period of time as the students of today who are so strapped with debt. There has to be a better way to pay for higher education today than the “Income sharing agreements” and perhaps it is high time for educators of many stripes to start thinking through this problem rather than those with ties to banks and other debt lenders.

  13. I wonder if Americans have realized that through actions like those described above and all other efforts to privatize for profit most aspects of social life, those in power have fundamentally shifted the center of, and reason for, society from attending to the various needs and quality of life of the people (aka the masses) to buikd and protect an economic system that exploits the natural and human resources of a population for the enrichment and accumulation of power of a few.

    Of course, the latter approach is not a new idea and to some degree, has always existed as the preferred vision of our nation of the most powerful social classes, but I don’t know that we have ever come as close as we are now to making this oligarchic fantasy a reality. Even the American Constitution seems unlikely to protect the majority of Americans from a future of modern peonage, as right wing members of SCOTUS reinterpret those words that promised a country “for and by the people” (perhaps we are already there, with most Americans living a credit subsidized standard of living) and corporations write the legislation that their bought and paid for national and state congress pass off as a product of their own efforts to protect the interests of the constituents at large.

    We in America seem to be enacting one of the most profound and dangerous enactments of the children’s story, The Emporer with not clothes”

  14. Rhonda,

    “We in America SEEM TO BE enacting one of the most profound and dangerous enactments of the children’s story, The Emporer with not clothes.”

    From my perspective , I believe ARE would be more correct.

  15. Gopper, the link in your post implies that you are a supporter of our Constitution. I’ve never seen that from you before.

    What changed?

  16. Interesting comments. Seems to me that having trade certification would give a young person a marketable skill and more maturity for wading into deeper waters. How to pay for it has become appalling.

  17. What if we fired all of the teachers. That would be a good start. Replaced them with performers a la Sesame Street. Used our entertainment prowess to present information in the most compelling way. Of course we couldn’t afford stage performers like we have used in every classroom since, well, forever, we’d have to use screen performers. Maybe some would be real and some would be make believe. Make it a competitive business market. Schools buy content instead of hiring it.

    Then we hired life coaches and assigned each to teams of students. Let them figure out the best mix of 1 on 1 or groupings with the goal of getting through a given set of modules. Watch, learn, practice, test, move on individually.

    The team with their coach would accept the responsibility that the goal would be to get as much as possible from this team but that for most, membership on this team would be temporary. Getting on to the next team would be celebrated as would welcoming new members.

    No grades, only chains of modular subjects. The reward would be getting on the next team sooner. If you can get through the modules that are defined as high school today you move on to the modules defined as community college today. Your age doesn’t matter.

    Coaches would be responsible for teaming with parents also.

    Coaches would have input, but not decision rights, over the selection of learning module style. The intellectual content would be nationally mandated, the delivery of that content suited to the team, coach and school.

    All education paid for by the state as long as coaches endorsed the students ability to go on.

    Why wouldn’t this be an improvement over the 19th century classroom?

  18. Student A might end up with a PhD equivalent in biology for instance but only high school level Eng Lit. Let employers figure out if that’s a problem.

  19. Pete, we’re not going to have to “fire all the teachers”. They’re quickly disappearing on their own.

  20. Can I encourage someone to look into Mitch Daniels coal gasification plant? That’s got to be a boondoggle that’s costing taxpayers a fortune and is detrimental to the health of indianas citizens. Where’s the payoff?

  21. The attraction to become a scientist is dimming with denials of science. The attraction to pursue STEM degrees is dimming when half of those grads cannot find jobs in the fields for which they studied. The attraction to apply what one has learned in the humanities by becoming a minister, a social worker, a teacher, etc. will fade further as already low pay falls further and fails to motivate income sharing benefactors.

    And then, as you’ve noted, those who go into higher-paying fields will be owned by their benefactors. Can they ‘call in’ the debt to make graduates work for ‘a song’ at their own establishments for less pay over long years? The potential for abuse and exploitation of bright, dedicated young folks is immense.

    There is a sense among some folks that if you dedicate your life to a high-paying profession, then there is something wrong with you because “really smart folks make real money?”. And if you’re not “smart enough” to avoid low-paying service professions, well, you’ve made a dumb choice and don’t deserve more pay. Apparently they won’t ‘deserve’ a college education either under this plan.

  22. Correction: There is a sense among some folks that if you DIDN’T dedicate your life to a high-paying profession, then there is something wrong with you because “really smart folks make real money?

  23. If anyone can look at the crop of democrat candidates for President and suggest that Republicans are anti-intellectual my mother would say, “That’s the pot calling the kettle black!”

  24. Hillary and Bernie debate. The Republicans tried that and it made them uncomfortable so the next session will be everybody over for milk and cookies.

    But Ken notices no difference.

    Why? He believes that we don’t need government much so why invest any real talent into it. In fact the more capable the candidates are the harder the job is to replace democracy with oligarchy.

  25. Pete comment > Rosemary, if I had a job in a business as tradition bound as education I would quit too.

    Pete have ever worked for Corporate America?? I have worked for eight different multi-national corporations in my life time. They all tell you they value creativity, but step over the line and the nail that stands up is hammered down, or removed and discarded.

  26. Where to start?! Education is so messed up in this country, from preschool to poverty level associates teaching graduate school. We need to educate people to be the best of the type of person they are, from CEO to assembly line worker to craftsman to college professor to nursery school teacher.

    Real teachers know that not everyone learns in the same manner, at the same speed, or to the same level. We are humans! Not everyone should go to college but everyone should appreciate learning throughout their lives. Our gradual narrowing of the learning path through the years to “everyone needs to go to college” has made people miserable on so many levels and has made colleges more expensive, overcrowded, and competitive with each other to such an extent that their promotional (outreach) departments are huge jacking up the price even more.

    Frustratingly, this one size fits all still hasn’t eliminated tracking in the lower levels due to race or color.

    But back to the topic of shares, commodifying educational achievements is pretty much part of our culture now as the Brookings institute proposal shows. We know that not everyone makes the same amount of money for what that do but almost everyone does valuable societal work. Our much maligned teachers are the most obvious example. What pays well is not necessarily what does the most good.

  27. Once I was out of school I only worked for multi national corporations. For most of that career innovation was highly valued. As my career got closer to the end much of that creativity was sacrificed to the conservative malarkey that overtook business. Everything was a cost, nothing was investment.

    My comments about education was that our basic education paradigms haven’t changed much certainly over my lifetime and much longer. I don’t know all of the reasons.

    Like almost everyone that I know I have had exposure to an extreme range of teachers. Some a complete waste of time others transformative. I don’t see much going on to sort them all out and use the transformative ones to mentor the others.

    I’m sure that there are many other contributing factors.

  28. Gail: The coal gasification project was killed by politics pure and simple. The technology was sound.
    Ken: The democrats all look like Einstein compared to the republican candidates. They’re all politicians so they ALL have baggage; but Trump and Carson don’t seem able to give a coherent intelligent answer to even a simple question. Fiorina can’t answer a question, but she keeps talking until the pesky questioner stops. The rest of the republicans apparently want to hold their own debate without questions from outsiders. I guess they have become so accustomed to gerrymandering and voter suppression that they now are threatened by any question that asks them to demonstrate their qualifications for the office of president.

    They want the exposure that television provides without the burden of campaigning. Boo hoo. Why don’t we just proclaim them all winners and give them trophies.

  29. I’ve said this before, and I’m sure I will have occasion to say it again: this is america, where the only thing that matters is money. There are no other values.

  30. Let’s face it, when Mitch Daniels was appointed to the presidency of Purdue University everyone should have seen this outlandish crap coming down the pike. He was appointed by a board of trustees of which he had appointed eight out of ten. My feeling is that this is a text book example of quid pro quo, but the kicker is that this blatant appearance of impropriety didn’t cause the Republicans to bat an eye. All of the traditional requisites were totally disregarded so they could appoint Mitch. Traditionally if one is going to lead a major university it might be nice to have some experience in education … Mitch has none. One might also expect one leading a world renowned university to have stellar academic credentials, i.e. a PhD … Mitch has none. As unbelievable as all of this is, the one thing that surprised me even more is that more Purdue alumni didn’t raise more hell about this poorly thought out decision.

  31. Phil; we would have to have information regarding Purdue alumni, who and where they are today, to rule out they were not part of the supporters of this misguided decision. As Ron so aptly stated; “This is America, where the only thing that matters is money.” Mitch’s local experience in education includes Charter schools and the ever-rising number of Voucher Students with fewer and fewer qualifications to apply for and receive voucher status. This is backed by Pence and Ballard; bypassing separation of church and state (in both the Constitution of the United States and the Constitution of the State of Indiana) regarding voucher students. They are all interested in quantity, not quality of education state-wide.

    Numbers matter to them…look at the number of sports venues in Indianapolis and the number of students seeking higher education…and being qualified for acceptance. Reading, ‘riting and ‘rithmetic are becoming things of the past…the removal of teaching cursive is one example which will lead to the inability of future generations to read or write to comprehend historic documents and family histories in letters and cards. If you are on Facebook; carefully read what appears to be professional posts and count the misspellings, poor grammar and lack of punctuation. Also read the comments posted; you will find more uneducated responses from younger people than those responses from older residents who had good basic education in years long gone by. It is a national epidemic with Daniels the leader and our local representative in stalling pubic education primarily. What are his credentials?

  32. Addendum; I feel the need to add that I have grandchildren and great-grandchildren who came out of or are still attending Charter Schools and/or are Voucher Students whose grammar and spelling inabilities are an embarrassment. So; what are the benefits of Charter Schools or being a Voucher Student?

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