Using equity to fund college instead of loans.

Interesting article about the antiquated system we have for funding college today.

At least with the federal home loan programs, the system attempts to qualify their borrowers, such that a borrower has a chance of not defaulting.

But this kind of evaluation is not even a consideration in the college student loan programs. It doesn't matter if you study petroleum engineering or sociology - you can borrow the same amount. And yet the job and income prospect for the two majors are obviously quite different.

This article suggests an equity-like program where an investor funds college in exchange for a part of the future income stream of the student. Conceptually it might work well, but if it is just another government program you can be assured that it will bring in a whole new set of subsidies. The college establishment hates the idea that the petroleum engineering student might get a better deal than the sociology major.

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