Future Earnings As Colleteral For Education Costs!

Luigi Zingales is an economics professor at the University of Chicago, the kind I’ve seen quoted in articles. He recently wrote an opinion piece for the NYT suggesting that instead of borrowing money for their college education, students could use their future earnings as collateral for the investors that would sponsor them with venture capital or hedge funds. Mr. Zingales has potential guidelines in mind, and argues that this would not be indentured servitude since the transaction would be voluntary. He also argues that subsidizing education is a drain on the economy, and makes a startling point since at least in part it contradicts his premise that a true market system, for which he’s obviously in favor, equalizes opportunity. It is difficult to see how since those who would be affected would more than likely not be those who would end up as high earners, but would be members of the middle class. This debt, by whatever name, would presumably be one more encumbrance and brake on their realizing their already tarnished dreams of home ownership and all the attendant expenses of such a home and family, and would be far from equalizing opportunity. Besides would such a system be an improvement over the present one? As to the indentured servitude argument, the reality of such an encumbrance and its consequences would trump the qualification he seems to put on it that it would be an individual choice. What about share cropping? What kind of choice was involved there? Education benefits the entire society. In fact part of our crisis is the lack of trained personnel in several areas such as engineering. As such subsidizing education in whatever forms can be considered self protection, if not self interest. Whether or not Mr. Zingales agrees with any of the objections to his idea, one must ask him if he would choose such a system for his own children?