As I wrote in a previous post (here), financing college costs is best thought of as an investment in human capital: What’s the cost of college? What’s the cost of financing? What’s the expected return on investment? Does it make sense to finance so much many for such a return? Sadly, too few parents and colleges help students seriously consider those decisions–nor the consequences of choosing poorly. (Of course, it’s in the college’s best interest not to.) Consequently, college grads in the US have over $1 trillion in outstanding student loan debt–and for many, little realistic hope of getting out from under it before their own children, or grandchildren, are college-age.
The State of Oregon last week passed a proposal that could radically change the way students pay for public colleges in that state, using an investment model in the human capital students develop. It looks like it could be a great step in a helpful direction…but a step with some serious potential flaws depending on how the actual program is put together. Continue reading An Investment Model For College Tuition