Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
I just ran across an interesting method of covering your tuition bills in an article on alternative ways of paying for college. They offer a number of alternative methods for paying for your schooling, but by far the most interesting of these was a service called MyRichUncle.com.
There’s not a whole lot of information at their site — just a bunch of gibberish about their ‘revolutionary’ scoring system, yadda, yadda, yadda. But according to the BankRate article:
MyRichUncle provides money from private investors to college students who need help with education expenses.
In return, a student agrees to pay a fixed percentage of their gross future income for a fixed period.
“They pay less when they make less,” says Raza Khan, managing director of MyRichUncle. “They pay more when they make more.”
This is an education investment not a loan, so there’s no interest to pay.
For every $1,000 of financial help, a student agrees to pay 10 to 40 basis points of future income. A basis point is one one-hundredth of a percentage point, so someone who receives an education investment of $10,000 might agree to pay anywhere from 1 to 4 percent of future income.
Payment periods are 10 years for graduate students and 15 years for undergraduate students. Payments begin six months after graduation.
Once the payment period ends, a student’s obligation ends even if you end up paying back less than you were given.
“We’re actually taking a chance on a student,” Khan says. “If a student succeeds, we succeed.”
This sounds like an interesting idea, but I’m not sure how I’d feel about being an indentured servant once I got out of school. This is fundamentally different from standard student loans, as you don’t seem to have the ability to accelerate your payments to rid yourself of the obligation. I guess such a plan could have a weird sort of upside, though — if you end up in a low paying deadend job after graduation, you could come out far ahead in terms of the cost of your college education.
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (692)
- Dish Network Customer Service SUCKS (534)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (325)
- How Much Should You Pay a Babysitter? (284)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (228)
- Will Mac OS X Lion Kill Quicken 2007? (191)