Would anyone buy stock in a future therapist?

CurrencyThere’s an interesting alternative to the student loan model of financing education floating around: In essence, sell stock in yourself.

On Wednesday, Senator Marco Rubio and Representative Tom Petri introduced legislation defining “income share agreements” (ISAs), which are basically contracts where investors could fund your education in exchange for a percentage of your future earnings. Under such agreements, which are expressly not loans, an investor could lay claim to a limit of 15 percent of your future income under a contract that could last no more than 30 years. (Those are just upper limits. Presumably most contracts would be shorter and have lower percentages of income involved.)

The idea is interesting, and worthy of consideration insofar as it transfers the risk associated with education funding away from the student and their family. One of the worst possible outcomes of taking out tens of thousands of dollars in student loans is then not being able to pay it back, either because you failed to finish your degree or, once you did, there simply weren’t enough well-paying jobs in your field. Changes in bankruptcy law have made it much more difficult to get out of student loan debt even in difficult circumstances. Under the proposed ISA rules, on the other hand, it would be the investor who would be out of luck, not the student.

Unfortunately, that doesn’t mean that selling stock in yourself is a good idea for a prospective student in the mental health professions of psychology, counseling, clinical social work, and family therapy. For one thing, private investors may simply not be willing to fund education that is long and expensive when they look at salary data in mental health. It seems much more likely that such investors would flock to students in more lucrative fields like business, engineering, technology, and medicine.

And even if some enterprising therapy students could attract investors willing to fund their education, the kind of system envisioned with ISAs holds the potential to be rather exploitive. Let’s say, for example, that you are unable to secure enough in student loans, so you turn to a private investor to fund your education. And — lucky you! — you find one willing to take on the risk. In exchange for $50,000 to fund your education, they ask for 10% of your income per year for the next 25 years.

To a hopeful student with no other options to fund schooling, that may be an attractive offer. From the outside, though, it just looks like a classier form of indentured servitude. It’s true that if you don’t complete your degree, you would not need to pay the money back. However, because these agreements define the investment as being in the individual, and not the specific career for which you received education funding, you would still owe a portion of what you make for the term of the agreement no matter what kind of work you wind up doing. Worse, if you do complete your degree, and you do find a well-paying job after graduation, you could easily wind up paying back four or five times the amount of the initial investment. Investors, after all, would understandably want their good investments to pay off bigger if they are taking all the risk for the bad investments.

If nothing else, I admire the creative thinking on Rubio’s and Petri’s part. (In fairness, it isn’t their original idea; startups like Upstart and Pave have been working on this model for some time.) There is certainly some merit in having the most successful students end up paying the most for their education, rather than further financially punishing those who struggle the most to find work or finish their degrees. However, as it applies in mental health, this kind of a funding vehicle seems like a band-aid at best. It would keep a supply of students coming in to overly long and expensive training programs, with primarily investors and universities profiting. We still need a viable long-term solution that makes graduate training in mental health accessible and affordable for those who prove they are capable of doing the work.

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Your comments here are welcome. You can post them in the comments below, or email me at ben[at]bencaldwell[dot]com.

Nazareth College was probably smart, not sexist, in rescinding tenure-track job offer

Education - Grad HatThe interwebs are in their typical fits of consternation this week over an accusation that Nazareth College, a small liberal-arts school in New York, rescinded an offer of a tenure-track professorship in philosophy to a woman who had attempted to negotiate the terms of the hire.

Those supporting the applicant, identified only as “W,” suggest the college was being sexist by refusing to negotiate with the woman when men negotiate terms of their employment commonly, including in academia. Those supporting the college are responding by describing W as immature and entitled, with criticisms boiling down to “Who the hell does she think she is?”

The histrionics are wrong on both sides. W was, like any applicant, wise to negotiate. But in what she asked for, she overplayed her hand and revealed a worrisome lack of knowledge about the university she was seeking to enter. There is no clear evidence the college was being sexist, even if many commentaries supporting Nazareth and criticizing the applicant have been.

For those readers not in academia, a tenure-track professorship is a big deal. It offers at least the potential of tenure, which at most schools means very strong job security. Tenure-track positions are increasingly rare, so they are very prized — putting universities at an advantage when negotiating the terms for such a hire.

Allegedly — and that term applies to this whole story, since it’s all based on W’s report to the blog The Philosophy Smoker — W received her initial job offer, and treated it like the beginning of a negotiation process. She responded with this:

As you know, I am very enthusiastic about the possibility of coming to Nazareth. Granting some of the following provisions would make my decision easier.

1) An increase of my starting salary to $65,000, which is more in line with what assistant professors in philosophy have been getting in the last few years.
2) An official semester of maternity leave.
3) A pre-tenure sabbatical at some point during the bottom half of my tenure clock.
4) No more than three new class preps per year for the first three years.
5) A start date of academic year 2015 so I can complete my postdoc.

I know that some of these might be easier to grant than others. Let me know what you think.

It is fully appropriate to negotiate salary in such a situation, and W has since said that her request was less than 20% above what was originally offered. The request for capping new class preps may or may not be reasonable; depending on her prior teaching experience, this might limit her to teaching no more than three classes total in her first year (which would be highly unusual), or it might not have much practical impact at all (if most of the classes the university wanted her to teach were ones she had taught elsewhere before, and thus would not need to create from scratch).

The maternity leave request seems silly — the university already would have to accommodate maternity leave in accordance with the law, and it is hard to tell what she meant by an “official semester” of such leave. But W said it was simply an effort to put in writing what she had already been informally offered, so let’s take her at her word there.

W’s mistakes are in the rest of the requests. (By the way, I am using that term “requests” purposefully — those who have been casting her requests as “demands” are themselves failing to understand how negotiation works. They also are apparently failing to actually read W’s letter.) The pre-tenure sabbatical and moved-start-date requests are would give any university pause, not because the requester is a woman, but because accommodating such requests just doesn’t happen at this type of school. A research university might honor such requests, though even there it would be extremely rare.

In a response rescinding the job offer entirely, Nazareth suggests that W should have been aware of that:

Thank you for your email. The search committee discussed your provisions. They were also reviewed by the Dean and the VPAA. It was determined that on the whole these provisions indicate an interest in teaching at a research university and not at a college, like ours, that is both teaching and student centered. Thus, the institution has decided to withdraw its offer of employment to you.

Thank you very much for your interest in Nazareth College. We wish you the best in finding a suitable position.

Liberal arts schools hire faculty to teach. (“Student-centered” is obtuse language, but it generally indicates that the school is focused more heavily on teaching and mentorship than on research.) If they hired for a position to start in fall 2014, they knew they would need someone who could start teaching then. If they would have been fine waiting a year to add a faculty member, they would have waited a year to do the hiring process.

You might argue that pushing her start date would not be a tremendous burden on the university — they could always hire more adjuncts — but this ignores the very real needs a university has for program administration, student advising and mentorship, and faculty governance, tasks that simply are not accomplished by part-timers. Depending on the school’s accreditors and their own internal targets, they might also have been hiring full-time faculty to meet specific requirements for the ratio of full-time faculty to full-time students.

And pre-tenure sabbatical — a (typically paid) break from teaching of a semester or more so that one can focus on research projects — is virtually unheard of. Would you go into an entry-level position in any company asking for a four-month break in your first few years?

The problem isn’t that W is a woman making these requests. It’s that the requests go far beyond what is reasonable in this context. Any good negotiator will be willing to walk away from a potential deal if the other side seems to be asking for too much. Perhaps the university unfairly blamed W for her naivete in making the requests, but regardless of whether those requests were viewed as troubling behavior in and of themselves or as a larger statement about the candidate’s preparedness, they would be enough to turn many universities away from her. It is an employer’s market in academia.

I would be the first to say that too many universities use that obtuse language of being “student-centered” to chill faculty into shutting up and making do with what the university is willing to offer them. It gets used to imply that faculty members should repress their own needs and desires in salary, benefits, and work-life balance in order for students to have lower tuition, greater access to faculty, shiny new sports facilities, or even guns on campus. And I agree with David Perry that questions of “fit” in an academic culture should be viewed skeptically, since they can be smokescreens for various forms of bias. Faculty absolutely should be critical of the use such terms, and absolutely should call out sexism where it exists in the negotiation process surrounding faculty hiring.

But there is no truly convincing evidence that sexism is present in Nazareth’s response to W. If anything, this simply seems to be an example of the importance of what one commenter on the original post noted:

This indicates how important it is to do your best to understand the culture and needs of the hiring institution, both before and during negotiations. […] “Will so-and-so be a good colleague and carry their fair share of the burden?” is often one of (if not *the*) most important considerations during the hiring process at small institutions.

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The Philosophy Smoker has a nice run-down of various commentaries since their original post was published, and takes a refreshingly positive and level-headed view of the whole debate.

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