The Dilemma of Student Loans in Finance Education

Could a new scheme alleviate the crippling cost of university fees for young Americans, who have already accumulated a trillion and a half dollars in student debts?

Dr Courtney McBeth tells Ed Butler how under the "income sharing agreement" scheme that she is piloting at the University of Utah, the amount that students repay depends on how much money they manage to earn in their future careers. This new approach frees graduates up to start a family or risk starting their own company, according to Charles Trafton, who runs a student loan marketplace called Edly.

But the financing is provided by investors looking to make a profit, in contrast to similar government-run schemes in the UK and Australia. And according to David Robinson of British think tank the Education Policy Institute, this means that the US scheme may not do much to improve social mobility or meet the needs of the jobs market.

(Picture: Coins stacks stepping up towards a money jar topped by a university mortar board; Credit: marchmeena29/Getty Images)