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Fixed tuition costs burden students with debt and cause them to make poor long term choices. I know too many people who have taken jobs (and eventually, careers) that they don't love because they feel the pressure of their student loan debt. These are people who should be entrepreneurs but can't take on the risk of failing, people who might be Steve Jobs or Bill Gates but instead drift into a life as a no-name consultant. If we want game-changing ideas and want to encourage students to be bold, then we need to enable them to do so financially. We need to buy the financial risk associated with their tuition and, quite literally, invest in them as people. This is not an idealistic plea for MIT to "abolish tuition," but rather, a call for MIT to better align its financial interests with those of its students.

If instead of tuition every student at MIT was required to commit a percentage of their future income (say, 10% for 10 years) students would be more free to take on risk and achieve great things. Some people may end up paying less money under this system, and others more. Even if there were a cap on how much high earners had to pay (e.g. 2x current tuition), the commitment scheme could be designed in such a way that MIT would take in more revenue from students than under the current fixed tuition cost system. And this is while decreasing the financial burden on students by allowing them to pay after they have realized the benefits of their education (i.e. when they are earning, based on their earnings).

With income commitments in place of fixed cost tuition, no student would be unable to attend MIT for financial reasons. I also believe that such a payment system would help to foster community and collaboration on campus, make a statement to the world about the purpose and value of education, and help the school to cultivate stronger and more lasting relationship with alumni.

If anyone is interested in this idea (or one of the many variations of it), feel free to reach out. I have been researching models of education payments like this for some time and will continue to do so until it (inevitably, in my opinion) becomes a reality.

Erik Duhaime (Sloan School, PhD student)

A New Financial Model, Improving accessibility and affordability, Revenue opportunities, Cost reduction strategies, Financial models and pricing structures


I think we should consider

I think we should consider this. MIT is better able to take risks because of its large reserves and that it is investing in a portfolio of students, not just one.

This would free students to follow their passions, because they are not held down by debt; while still provide an incentive to work, since students would retain ~90% of their income.

An income commitment was one

An income commitment was one of the things I brainstormed earlier here:


I'd be very curious whether someone such as yourself in Sloan has insight into the business/financial model's potential drawbacks - I'm just an engineer without much finance background who is very frustrated with debt. One thing that I'd think bears considering is some kind of a tiered / progressive model, more like a tax system. Remember that taking 10% of a low earner's income can have a much larger impact than taking 10% of a high earner's, in terms of ability to maintain a living wage.