Purdue President Mitch Daniels’ alternative idea to student debt has University Senate members questioning the program.
David Sanders, associate professor of biological sciences and vice chair of the Senate, sat through a presentation about income share agreements and how the Purdue Research Foundation manages them. Soon after, the Foundation put out a request for people to participate in a new program eliminating a large amount of student debt, “Bet on a Boiler.”
A lot of faculty pushback against the idea was the result of the request. In simple terms, the program is a pilot project where the University pays for a part of an undergraduate’s college tuition and then Purdue is entitled to a part of the student’s future income.
“It’s another thing on the list of right-wing Plutocratic ideas for higher education that President Daniels has tried to push on us,” said Sanders.
Sanders said Daniels is trying to transform the University into a corporate dream of what higher education institutions should be.
“It’s a form of gambling; it’s even called ‘Bet on a Boiler,’” Sanders said.
A concern about the program is its bias toward majors and fields that traditionally command higher salaries in the professional world, such as engineering and pharmacy. Sanders suggested the program may discriminate against some groups, like women in the case of engineering, or where the major or field is heavily occupied by one gender or race.
“(Bet on a Boiler) is a part of the Purdue Research Foundation, which is not a transparent organization and no one supervises,” said Sanders. “No one is saying the current student debt situation is ideal, but just because there was an idea about this four decades ago doesn’t mean we should be implementing it.”
The plan is to institute the program relatively soon, but no student will be forced to participate.
“When you deal with debt, a loan, you know what it will cost you,” said Sanders. “It’s difficult for students to calculate that and all the information will be in favor of the corporations, (which) won’t do (the program) unless they have the pricing set to make money off it.”
He went on to say people are afraid of debt and this is a type of debt, an undefined debt, and he sees no good reason to pick this idea.
Kirk Alter, chair of the University Senate, was not familiar with the program, and once he heard about it, he focused on both the downsides and upsides.
“Sometimes there’s a natural tension,” said Alter. “(A question was) ‘will this be equitable?’ There’s 100 questions you can ask and they’re all legitimate about equity.”
Alter believes that having the Purdue Research Foundation manage the project is the logical thing to do and suggested they have a senator to discuss real expertise on the program.
He did have a concern similar to Sanders’ concern about College of Liberal Arts students and others who might make less money than STEM majors.
“It’s about the students,” said Alter. “What about a student who doesn’t have a lot of financial education and background, could one be reeled into a very bad deal? Could they be taken advantage of?”
Alter says he doesn’t think so, but with education, people can make an informed decision.
“The immediate answer was that the program wouldn’t even be recommended to someone who couldn’t use it,” he said. “Clearly the students are in the mind of the Purdue Research Foundation.”
Unlike Sanders, Alter believes this is a good alternative way for students to finance their education.
The first group of students who will be reached out to are juniors and seniors, who have a better idea about their financial situation and know if it is right for them.
“(It’s) a small sample group and we’re going to see how it happens, so I think we should wait to see what the model looks like before we give terrible criticism,” said Alter.
The program is planned to begin in March. Alter is being what he calls “cautiously optimistic” about the process.
“This is an experiment, it’s a pilot and one thing that is fundamental is that we are a research-based university,” said Alter. “You could look as this an experiment by Purdue Research Foundation at the initiative. And the idea is does this, might this work and how it would work and what issues might there be?”
