This might seem like a really good idea - until you work through the consequences. The idea is that aspiring college students sell stakes in their future earnings on something like a student stock market. "I envision a whole new equity market for higher education in the next five years where today there's only debt," says Chuck Trafton, who runs a hedge fund. Ah, but I can see the problems already. Not all students will be able to sell options - and the ones declined will be the usual set of minorities and less affluent students. As well, when companies sell stock, they assume a fiduciary responsibility to prioritize earnings - will the same apply to graduates? Will the options be traded? Will there be scams and insider trading? If we have to use a loans-based system, I'm in favour of income-based repayment - but not an options market.
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