The Assault Continues….

File under: Surely you jest.

The latest, widely-reported “initiative” from former Governor and current President of Purdue Mitch Daniels is an “innovative” method of financing college educations: have private individuals “invest” in a student in return for a portion of that student’s eventual earnings.

The impetus for this brilliant idea, according to Daniels, was concern over student loan debt. How this would improve the situation is unclear; owing your “patron” is unlikely to be any less burdensome–or less costly– than owing the bank. (If we were really interested in addressing student debt, we’d pass Elizabeth Warren’s bill and lower interest rates, or follow Germany’s example and provide free public education through college.)

And echoes of feudalism aside, this does raise a few questions. Who, for example, is going to “invest” in a philosophy degree? (Oh, I forgot: Mitch and his pal in Wisconsin, Scott Walker, don’t value a “search for truth” or a liberal arts education. They’re all about “job training” and generating more worker bees…)

Young people used to pay for their passage to the New World by promising to work for a certain number of years for an employer who would finance the voyage. This was called “indentured servitude.”  Indentures couldn’t marry without the permission of the employer,  and their obligation to labor for their “owner” was enforced by the courts. Owners could buy and sell indentured servants’ contracts and the right to their labor.

This raises some fascinating possibilities: while it’s unlikely the proposed contracts to finance an education would include a right to approve marriages, could the “investor” require the student to choose a job that paid more rather than a lower-paid one that the student preferred?

Could the investor “sell” the contract at a profit if the student did well and the negotiated percentage of her income represented a better-than-anticipated return on investment?

Could the investor require his “investment” to abstain from smoking, drinking and other risky behaviors that might threaten the duration of the student’s work life?

Actually, this bizarre proposal suggests that America is overdue for a discussion of what constitutes an investment–and especially about the difference between public and private investments.

Believe it or not, Mitch, that philosophy major is a good public investment, even if it doesn’t make much sense to the rich guy looking for a kid who’ll be his annuity.

 

 

18 thoughts on “The Assault Continues….

  1. And did Mitch put of his wealth where his big mouth is? Did he offer up backing any potential student(s) himself? I’m surprised he didn’t find a way to propose college level vouchers from public education tax dollars in lieu of private backers.

  2. Instead of the NFL and NBA drafts, we could have college drafts where the students could trotted out to be viewed and assessed by potential backers. This might create a whole new financial industry: Scholastic Futures Trading. Alum A buys the future for a student, as the student progresses through school his future value increases or decreases based on his potential to land a high-paying position after graduation. If he spends too much time partying and does poorly in class, the value of his future decreases; if he achieves his perfect 4.0 AND is majoring in a “useful” degree, the value of his future increases. Like stock trading, there will be those individuals that would stalk the student, observe his eating and sleeping habits, his sexual orientation, his body weight, medical history; at the first sign of trouble, they would be selling or shorting his future. It would be a brave new world.

  3. I’ve yet to hear a really good idea from Mitch Daniels–nothing when he was governor, and certainly nothing since he’s been at Purdue. He is not qualified for the job he now holds, and my hope is that he can leave Purdue (and the sooner the better) without doing too much damage.

  4. Congratulations, Sheila. You’ve earned a rare “Great Column” from me.

    Of course, Mitch the Jackass made this one very easy for you by placing his feudalistic arrogance on a belt-high tee, but you gave this idiotic idea a satisfying smashing.

  5. One thing that we have to give the Great Oligarchy Plot. They are masters at inventing problems that can only be solved by advancing the plot.

    Remember when Rublican’s highest calling was the country?

  6. There are many companies that subsidize through reimbursement their employees’ educations as part of the compensation and benefits package. The difference is that the employee is paid their regular salary or hourly wage throughout. The employer may require a commitment of employment for a specified time for subsidizing an advanced degree. This arrangement allows the employer and the employee to enjoy the fruits of a more educated employee’s contributions to the company. The employer gets a better educated employee and the employee can leverage his new knowledge for advancement. This is very different from what Daniels has proposed.
    This suggestion is so fraught with the possibilities for abuse that it deserves serious blowback. It is a modern day version of indentured servitude.

  7. When I read about this a couple days ago it shocked me to the point of being speechless. I have been ashamed to admit that I’m a Purdue Alum ever since his self-appointed trustees hired him to be the President of what used to be a great university.

    While I agree that some college degrees seem to be nothing more than robbing a student blind, this brings his Republican Profiteering to an entirely new level of indecency.

  8. This owner of the labor contract could also determine what percentage of wages the laborer could keep, what job would offer the highest profit or a long term profit, while giving a minimal standard of living. All of these things could be negotiated.

    This idea was written about by Mary Doria Russell in book called “Sparrow”. In this novel, the Catholic Church buys up orphaned, abandoned children from the barrios in Brazil: the Church takes care of their health, feeds them, educates them to the best of the child’s ability. In return the children/adults are indebted and are obliged to take whatever employment the church determines. Of course, the Church is a benevolent dictator. Strangely enough they are not obligated to become Catholic, although many do.
    By the way, this is not the main theme of the book. Just something seen in the future where the story is placed. Maybe Mitch read the book?

  9. This idea will no doubt have many GOP supporters–Finally (!) a legal was of owning a human being once more. If you “buy” enough of them after graduation they could be hired to drive your car, cook, garden and so many other useful things around the old mansion in order to repay their debt. It’s a wonder no one thought of this before . . . O wait. They did. It was called slavery. My man Mitch is still haunting Indiana today.

  10. Since the concept is “investment”, this word alone has implications that should condemn the plan. Let’s say, for example, Turner wanted to “invest” in nursing students, who would, in turn, be required to work in one of his family’s nursing homes. What if the nurse found out she is not a good fit for geriatrics or long-term care, or, more importantly, what if he/she felt that the place was badly understaffed, or that Medicare and/or Medicaid regulations were not being followed–would the nurse be deterred from turning the nursing home in or be intimidated against testifying against her “investor”? This is just one example. Many college graduates find out they aren’t a good fit for certain jobs they thought they would like for a lot of reasons. What would be the result of quitting a job–you just know that the “investor” is going to be protected at all costs.

  11. Actually, this idea is an old one. Milton Friedman suggested people incorporate and sell shares of themselves (their future earnings) back in the 1950s I believe.

    On another note, beyond “Sparrow” that Jan mentioned is “The Unincorporated Man” by Dani and Eytan Kollin. In this version, with an explicit nod to Friedman, there is a future world that recovers from disaster and becomes an Ayn Randian paradise, with weak government and everything, courts and police included, subject to the “free market”. Everyone is incorporated at birth and spends their time trying to buy a majority stake in themselves. Until then, they are told where to work and which jobs to take by the majority shareholders. It actually is part of a series, but I only read the first book.

    Of course in the case that Mitch is proposing, I suspect that you would be free to write any contract you like — just like you do with your landlord, bank, insurance company — or try reading what you agreed to the last time you used computer software. 8)>

  12. I sent this blog to David Bangert who gave it all the free and uncritical press Daniels always gets in the local Gannet rag the Journal and Courier. But this level of uncritical sucking up even shocked me. I had to rewrite my comments about fifty times to tame it down, and it’s still insulting as hell. First, tuition is so high because the long game of the lobbyists (let’s be honest about who is writing legislation) is to fully privatize education. So parity between, say, a Purdue degree and a Kalpan ‘degree’ are getting more and more achievable. Just get your hooks into that gazillion dollar student loan market and make your shareholders obscenely wealthy. So with this mindset, Daniels is just carrying through on making Purdue an overpriced Ivy Tech. And so not only are Daniels friends making out like bandits being able to do things like privatizing the gain on drugs developed on the public research dime this just becomes another revenue stream. And as has been pointed out, we no longer have ANY influence on our government, Daniels will continue to tout his genius idea, and after an interval in the echo chamber of all these guys calling each others ideas genius, it will happen. I honestly threw up in my mouth thinking of all the creepy things these ‘investors’ could demand from their ‘investment.’ I’m still just astounded that even the local paper didn’t blush over publishing these remarks.

  13. My wife and I have two kids, now pretty much grown up with solid jobs. Over the years we put out a lot of money for their care and education, so thanks to Mitch, I think we have a good plan. I think we could whip up a document when they have their next birthday, showing how much we “invested” in them over the years, and a bill with a fair interest rate. After all, it’s all about money, right? We could use those payments to take the place of our Social Security and other pension plans. If that works out, this could become the plan used by everyone. Good way to get rid of the country’s biggest problem, our government. Thanks, Mitch.

    I am really interested in seeing how the Purdue student community will weigh in on this idea. Maybe some of the ones with proclivities toward Mitch might re-think their positions.

  14. My grandson Tyler is finishing his second year at Ball State; he started his own college fund his second year at Irvington Preparatory Academy. When not in school even then, he was working and putting money into his account. His junior year at IPA he received a Presidential Award of $18,000; he has also received math and science awards during high school. When he graduated he was given an award naming him “The Student Most Likely To Appear On The History Channel”:) I love that one. After being accepted at all major colleges he applied to, he opted for BSU, they awarded him a $12,000 scholarship. He is still working when not in school and his parents are in debt co-signing for student loans. My son is a brick mason, seasonal work, he does side jobs including laying carpet to keep up with the bills. His wife is a janitor full time at a Catholic church and school and works one day per week cleaning the theater on Mass Ave. She also home-schools their sons 13 and 15 years old. Tyler wants to be a mathmatical engineer, his mid-semester grades were 4 A’s and 1 B.

    My granddaughter Ashley graduated from IU after 2 years of college and 3 years in the IU School of Nursing; she owes $55,000 in school loans. She too worked when not in school to help pay for her education; she carried a 3.9 GPA throughout her school years. Students like these two deserve some form of assistance; even if it is only for the Republicans to pass the bill allowing students to refinance studen loans. Ashley is one of the six-member pediatric heart surgery team at Riley Hospital for Children; she is only 27 years old and sees no end to paying for her student loans.

    Ashley’s brother D.J. is a paramedic in the U.S. Navy; he worked as a Certified Nursing Assistant for three years in nursing homes before deciding he wanted to become a nurse because he saw the need for male nurses. He began taking the courses at Ivy Tech, planning to transfer his credits to University of Indianapolis to continue his nursing education. Looking at his sister’s loans and seeing what was ahead regarding any help paying for a college education, he decided to join the military and use the G.I. Bill to continue when his four years are up. Who knows what he will find with that assistance in two years? Will he find anything or will he become a casualty if the Republicans have their way regarding their war mongering? D.J. has asked for active duty; he is a fine man and I don’t want to lose him because of Boehner, McConnell and the fools who call themselves the Republican party and who support war at any cost. Mitch Daniels can go piss up a rope with his asinine, publicity grabbing idea.

  15. JoAnne, you are missing the boat here. I’m sure you contributed to the education and development of these folks. Even in-kind hours can be monetized. Make out that bill ASAP, and make sure you include the interest over the years. Give them the article about Mitch and tell them that he is your hero. Then present the bill. I’m sure they will be happy to climb on the wagon and show their gratitude. Let’s get rid of Social Security and guilt our kids into it.

  16. JoAnn, I forgot to tell you that I sent Mitch’s idea to my kids, and can’t fully tell you how enthusiastic they were about the idea. If they have kids, the idea of indentured servanthood will be such an appealing concept for the whole family.

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