Selling Out

Given the increase in the cost of college, financing a college education is becoming more and more difficult.

Although this may eventually pan out as a good way to finance college, it just seems too much like indentured servitude. Easy for me to say I guess since I'm done with my college years.

From the Boston Globe...

The idea, sometimes called human capital contracts, is that investors agree to cover the costs of college or graduate school in return for a percentage of the students' future earnings over a fixed period of time. Since payments are scaled to wages, the odds of default - and of financial hardship for the graduate - are greatly reduced.

This scheme transfers much of the risk from students to investors. But if the students earn handsomely, the investors stand to gain more than they would under a traditional loan.

Watch out for the subprime college loan crisis in 2020!