My suggestion to achieve this is to cap repayments (of non-dischargable loans), perhaps at 15% of taxable income, and written off 20 years after signing. That would make lenders very interested in the outcomes of various courses. And their offers to prospective students would convey useful career advice, too.
$393 is 15% of $2620 which annualizes to $31,512, which is about the median personal income for full-time workers (whoops, before taxes). ($222 is 15% of $17,760 annual, about the poverty line for two.) That's not a wildly big change over the current state.
20% pretax deduction would probably be sufficient for repayment. Of course loan reform in general would probably be a good idea. If there are 10k graduating with a degree in a field with only 100 jobs/year needing that degree, or likewise paying less than $40k/year, should probably not be granting loans for those degrees in the first place.
10,15,20% all plausible figures, the point is just to ensure that it can't get so large that it gets in the way of living your life.
> 10k graduating with a degree in a field with only 100 jobs/year needing that degree
What I'd live very much to avoid is having a centralized body which makes such decisions. Under my scheme, lenders who identify such fields will be reluctant to grant loans, but how they decide what's in the field, and what exceptions to make, the can do however they like.
A few years ago, I read that at least two big-name U.S. universities announced plans to pilot something like this, where tuition was free, and they'd get a fixed percentage of employment income (wages plus bonus, etc.) for a fixed number of years after graduation.
The university takes on the risk, but they have much more information about their students and their degree programs than students, governments, or private lenders, so they're probably best placed to be making informed risk decisions. Under the current systems, the government and the student take on the risk, while the university and the private lenders get the rewards.
