Congresspeople liked the idea so much the first time he brought it up, they asked Mitch Daniels back to address it at length.
Several months after casually mentioning individual investors might take on the cost of some students' educations, Purdue University President Mitch Daniels joined a conservative-leaning panel Wednesday to address a joint congressional committee about what he sees as the scourge of student loan debt.
Daniels was questioned by members of the Joint Economic Committee, including chairman and Sen. Dan Coats (R-IN), about his plan to line up individual investors to pay for Purdue students to go to college, in exchange for a portion of those students’ future earnings.
Daniels is pushing for individual benefactors to stake their own money on student success because he thinks too much federal money is being injected into higher education and too much of it is going to students without financial need. He insists students wouldn't be indebted, but would enter into an equity agreement with their angel investors. At the same time, Daniels used the hearing to refer to traditional student loans once more as "indentured servitude."
He says he’d like to see a system more like the need-based Perkins loans currently available to borrowers.
“My sense is that a simplified program – federal loan program – coupled with some other vehicles of the kind we’ve discussed here today, would probably wind up looking more like the Perkins program than the other ones that we have today.”
But Daniels received some of the same questions that continue to dog so-called “income share agreements”. Congressman Don Beyer (D-VA) wondered if investors wouldn’t also give preference to students who show signs of material wealth, just like Daniels worries federal loans already do.