“Earn While You Learn” Or “Borrow Today, Pay Back Tomorrow?”

I'm a huge fan of "Earn while you learn", and I think more companies, (in manufacturing and beyond), should be incorporating "in house" internship and training programs.

Companies could even offer very low pay options, which would include a contract being signed, in which the student would promise to remain employed there for a given amount of time after training.

Naturally, certain political factions would call this indentured servitude...but so is owing the government $100K +, with no job opportunities in sight.

Why? Isn't that just unsecured debt? - something that insolvency just washes away?

Not that simple...we're talking about the government. They will get their money.

Most lawyers in the US will help you screw everybody else you owe money to, but are unlikely to even bother trying to take on the government.

http://www.rothschildbklaw.com/What-Debt-Can-You-Discharge/Student-Loans.shtml

I like the way they contradict themselves:

How Bankruptcy Can Help

Just because a student loan cannot be discharged does not mean that bankruptcy cannot benefit you. In many cases, student loans are just one debt in a mix of debts. By eliminating the other debts, you may find that paying student loans is much easier. We will help you understand all of your options for debt relief.

We have a system in AUS called "HECS" (Higher Education Contribution Scheme) where student can opt to have the Gvt. fund their tuition fees.

The debt is linked to your tax file number (In the USA I suppose it's your IRS reference or similar). Once you start earning beyond a certain threshold, you pay an additional 2% income tax until the debt is gone.

Thus, when you graduate and have low income, the repayment burden is very low. As you gain experience and salary increases, then the repayments eventually remove the debt.

The debt is only indexed to inflation with no compounded interest.

The philosophy behind this is that the Gvt. invests in our future earning potential for the good of the nation and eventually recovers the investment (funds) to be re-invested, while the nation benefits from the increased capabilities of a well educated population.

Note: The debt is a personal liability to the Gvt. and is annexed when you die, so the obligation for unpaid amounts does not pass onto relatives or children.

This has been running since around 1980.

Students still have to fund their own living expenses.

That doesn't sound too bad, but I'd personally still prefer the "Earn while you learn" model. I'm just much better at learning while hands on.

Unfortunately, most US colleges, (except tech schools), are teaching the "well rounded" things that should have been taught in high school. A person that's going into engineering, should not have to borrow money to take English Lit. in college.

Some people already think co-op programs rock. I know I hired several students soon to be employees from a co-op in Waterloo, Ontario. One of them became a co-owner of the company when I retired. Governments do this all the time when they send young people to military colleges or other colleges. And yes they owe time back once they graduate. My two daughters used the officer programs as a means of financing and getting a higher education. One was trained directly by a military college (RMC) and the other went to a civilian school.

Another method we use here in Canada is to allow parents to have a tax sheltered (including interest accrued) account that is topped up each year by a federal grant. The account can only be withdrawn for education purposes or else it gets taxed as income. I did this for all of my kids and put away the maximum each year. It meant each child could get about 3 full years of schooling (excluding grants or military adjustment) out of the fund. And I include all expenses from tuition, books, lodging, and food. You do need a good financial advisor as to where to make the money work best. It is a small step to cheap education or at least an education without the burden of high debt in the future. It does take a commitment of money to be set aside. Just set it as a priority and hopefully they will spread their wings and leave the nest to cycle their own family futures. By the way the federal grant is small but effective if allowed to accumulate over an 18 year period. It is $400 on the first $2000/yr of investment. Still it is 20% of the $2000 each year invested. I just made sure each kid went to school so it did not have to be paid back.

I am not sure what you have available in USA but I do think their are options. Just do not expect to graduate in a hurry.

Many attempts to post!! Argh!!