Good luck enforcing indentured servitude contracts. This has been tried.
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Replying to @Foudroyant
Sounds like you know exactly nothing about what we’re doing, so that’s a bold statement
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Replying to @AustenAllred
I do know about Yale's experiment along those lines and the difficulties they had. Are your contract terms on the internet somewhere?
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Replying to @Foudroyant
From the 70s? Yeah things are a little different now. They are but I don’t share the contract publicly. In short: 17% gross salary for two years Only when making $50k+/yr $30k total cap Expires after 5 yrs We get access to student’s bank account and tax returns
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Replying to @AustenAllred @Foudroyant
That's cool, you haven't mentioned what you do for the exceptions. - People with health issues? - Change their mind? - Work equity-only? - Continue education?
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The numbers are very specifically pegged to software devs. Your $50k+ represents most or all of a median salary for a US family wrapped up in one person. This is awesome for that person. But would it work for chef's school? Journalism? Psychology? Medicine?
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Replying to @gatesvp @AustenAllred
If you can perfect the contractual form/obtain legal certainty re enforceability it should work for any kind of education depending on if there are limits on what terms you can charge. The returns on even modest investments in human capital blow away most financial products.
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Replying to @Foudroyant @gatesvp
You’re right. Our average increase in salary is $40k/yr. The lifetime value of that is in the millions. We charge less, on average, than the delta in the first year’s salary, and still do very well. It’s a no brainer for all parties. It’s making that happen that’s hard.
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The contracts are solid outside of bankruptcy, which is the same as every other type of note. Though, again, not every model requires 100% payback. It’s a different way of looking at education that we built in from the start. Our model would *technically* be fine at 50%.
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Replying to @AustenAllred @gatesvp
Has there been an enforcement in a voluntary default? It's also a very pro-cyclical form of education finance and many education decisions are made counter-cyclically.
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Yup, talk to @TonioDeSo who sees 100x what we do
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