Former Indiana Gov. and current Purdue University President Mitch Daniels has some innovative ideas for helping students leave college without thousands in student loan debt. But he needs Congress to create a clear framework for schools to work within.
His boldest idea — and the most controversial — would give students the opportunity to find an investor or a financial backer to put them through school in exchange for a share of their future income, the Indianapolis Star reported.
“I was going to call it ‘Bet on a Boiler,’ ” he told the paper. “We’ve got this data that says if you support the education of a student at our school, they’re almost certain to be able to pay it back. So it would be a sound investment.”
Most likely the investors would be alumni. Daniels believes that the program might also appeal to alumni who would prefer that their money be used to directly help a student rather than just a g
If Congress backs the idea, Daniels said, the program could appeal to alumni as an alternative to a straight donation. And some might prefer that their repayment money be used to help other students, he said.
But the idea has faced some criticism. It’s been compared to indentured servitude, a comparison that Daniels laughed off in an interview.
“Right now, if you need help paying for school, you’re already paying someone back. It’s just a question of who you’re going to be obligated to,” Daniels told the Lafayette Journal and Courier.
Daniels’ biggest struggle now is getting the framework in place to actually implement this kind of innovative program.
“When I bring it up, people say, ‘Yeah, it’s a great concept. But the law is not clear,’ ” Daniels said last Tuesday after testifying before a House panel working on a higher-education bill.
Sen. Marco Rubio (R-Fla.) and former Rep. Tom Petri (R-Wis.) introduced legislation last year to help create the legal framework for income-sharing agreements, but the bills never went anywhere. Daniels hopes that this year will be different.
He also plugged several other recommendations for higher education improvements, according to the Star. Daniels called for reducing regulatory burdens on schools and allowing schools to focus on subject mastery rather than on credit hours.
