A Look Back at a Good Letter

Last night, our business department, led by chair Dr. Tim Kearney, hosted an outstanding symposium featuring Bishop Joseph Bambera and several professors from colleges in the Wilkes-Barre area. The event’s purpose was to revisit the U.S. Conference of Catholic Bishops’ pastoral letter Economic Justice for All on the 25^th anniversary of its publication and examine some of the letter’s themes and messages in light of today’s economic climate. Bishop Bambera focused his comments primarily on the letter’s emphasis on human dignity and the importance of building (or rebuilding) our economy on a moral foundation, offering an interpretation of the letter not strictly as a critique of free-market capitalism but more relevantly as a non-partisan call to awareness and action.

His message (as well as the messages contained in the contributions of the professors of business, economics, and religious studies serving as panelists) was inspiring even for us non-religious audience members, but I left feeling a bit disappointed that no one delved meaningfully into the practical realm or offered some (perhaps opinionated) examples of policies and practices to implement in alignment with the letter’s philosophies or in answer to its compelling appeals. I realize that this was not the intended purpose of the forum, but I was secretly hoping for something a little meatier. And while I waited for the heated discussion about the nuances of government involvement in job creation that never came, my mind eventually wandered, as it often does at times like these, to Rhymes founder Jeff Weiss and our shared fascination (his the impressively more well-informed inspiration for mine) with human capital contracts.

The question I wanted to ask but didn’t was, “How can we apply the ideas in Economic Justice to one of our country’s most pressing financial problems and presumably a painfully real problem to many of the students in this room, the recent explosion of overwhelming student loan debt?” I didn’t study economics and admit to knowing nothing of the letter before last night, but because it’s a document important enough for Harvard’s economics department to at one point assign as introductory reading for all its incoming freshmen, as one panelist pointed out, I thought it surely must contain something of relevance to this issue. As I was trying to pinpoint this connection, King’s College economics chair Dr. Margarita Rose, the final speaker of the evening, began her remarks by describing the goal she has for her department’s graduates, a goal much in line with the letter’s ideology: success in a career chosen not out of financial necessity but because of a firm belief in the clarity of its purpose and in its ongoing contributions to the well-being of others. This philosophy and its relatedness to Economic Justice need not be limited to their origins in Catholic social teaching, for their implications clearly transcend religion. In fact, Jeff said it right here back in May, citing Robert Shiller’s speech to Yale finance grads, which I will quote again in case you decided not to click the link:

Finance, at its best, does not merely manage risk, but also acts as the steward of society’s assets and an advocate of its deepest goals. Beyond compensation, the next generation of finance professionals will be paid its truest rewards in the satisfaction that comes with the gains made in democratizing finance – extending its benefits into corners of society where they are most needed.

So there’s the application. We need a more humane economy, which means we need more people doing work that makes a difference in others’ lives. Realistically, this growth is going to have to come from young people who intentionally embark on career paths suitable to that purpose, perhaps knowing they’re likely to make less money. To get more people doing difference-making work, it needs to be financially feasible for them, which is unlikely to be the case very often as long as “student loan dread” hangs over graduates’ heads. Enter HCCs. If you’ve spent much time reading this blog, you probably don’t need further convincing that these equity-based instruments have the potential to effect some pretty powerful change, but it never hurts to look at the reasons from a slightly different angle.

Not a Lost Cause

The message in our year-opening meeting for all university faculty and staff this morning couldn’t have been clearer: things are good here for the moment (we’re welcoming the school’s largest-ever freshman class, retention rates are high, our faculty is excellent, our teams are winning, our financial future looks sunny, etc.), but as an institution, we need to think long and hard about how to step our game up in order to proactively combat the growing perception that attending college, particularly at a private school like ours, may very well be a colossal waste of money.

Well-known higher education consultant Pat Sanaghan, our keynote speaker, was very good. He touched on a variety of interesting issues, among them online learning (discussed here by Rhymes heavyweight Jeff Weiss), noting that he has observed an approximate 20-60-20 response to the emergence of the online “classroom” (quotation marks intended to indicate my position): 20 percent of folks in higher education love the concept, 60 percent are unsure or undecided, and 20 percent despise the notion of electronic learning to their very core.

As the focus of his presentation, Pat posed a great question to spur some institutional introspection: “What would be lost if our school didn’t exist?” As he expounded on sub-topics like accurately assessing the value we provide our students and the importance of not trying to be something we’re not, I couldn’t help but re-frame his question from a student’s perspective: “What would be lost if I didn’t go to college?” To be clear, I don’t ask this question to imply that the college experience has no value; quite the opposite, in fact. I don’t think, however, that it’s a question that’s as easy to answer as it might first appear. Without even delving into the world of the student-athlete, I happen to believe very strongly that it’s nearly impossible to replace the value of the critical thinking, writing, and speaking college professors elicit, but the acquisition and refinement of those big-picture skills are the mere beginnings of an answer. In any case, the question more relevant to the kinds of discussions happening here is probably “What would be lost if I didn’t go to this college?” It must be a frightening prospect for an administrator or board member to confront the possibility of the answer being “nothing,” but as pointed out in this recent flash alert, it’s a potential reality that’s becoming increasingly important for schools to consider, with an obvious emphasis on the financial side of things. It sounds like if they don’t, plenty of people soon will.

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Andy Palmer on Upstart

“To scale entrepreneurship in the US, we need to scale our ability to empower and coach young people who are capable of taking risks and executing on their passions.”

FLASH ALERT!

It’s 11:20pm on a Friday night and I’m catching up on some blog reading. I’m on my last article–a review of Luigi Zingales’s most recent book, A Capitalism for the People, by Modeled Behavior‘s Adam Ozimek, when I get to the following paragraph:

While the book has shortcomings, there are also areas where Zingales proposals and ideas are stronger than his critics believe.  For instance, he argues that investors should be able to make equity investments in young people that they can use as an alternative to student loans to pay for to college. This means a student gets the money for college from an investor, who in return gets a percentage stake in future earnings for some period of time. Critics have focused on the adverse selection problem, or that the real issue is that schools are just too expensive. But these critics are focusing on the promised outcome of debt relief for students who don’t end up making a lot of money, while the real benefit, as is often the case with Zingales, is creating a market.  The market here is for information about which schools deliver the most value. A well-functioning market that provides equity financing for students will be one that excels specifically at solving adverse selection problem and giving schools incentives to be cheaper. Doing this is hard, which is exactly why we need profit seeking companies and a market working to do it better.  Students won’t just benefit from equity financing by receiving a get-out-of-debt-free card, but by having an investor provide them advice on where they can get their highest value of investment.

All of a sudden, it seems that Luigi Zingales has taken over my life. First there was his NYT piece last month which sparked this post by me. That then encouraged me to pick up his old book, Saving Capitalism from the Capitlists, some chapters of which I have fully enjoyed, while other sections have bored me. Then this week, two friends recommended that I check out Russ Roberts’s Econ Talks, which featured Zingales as a guest recently. And now this. Professor Zingales can definitely expect an email from me in the near future!

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Three Ways Politicians And Entrepreneurs Are Helping To Make Higher Education More Affordable

A short Fast Company blurb featuring two initiatives previously mentioned on Rhymes with Education: SoFi and Fix UC.

Another Take on Human Capital Contracts

Fellow Rhymes with Education contributor Andrew Bennett’s decision to ignore title capitalization conventions in his most recent post notwithstanding, he (re-)asks a very interesting question: “Why are the things we study so often so unrelated to the things we end up doing for a living?”

I don’t have the answer, but the folks at Upstart, a SF-based startup which just announced its public launch this week and boasts Dallas Mavericks owner and maverick financier Mark Cuban as just one of its many impressive funders, think that not only have they stumbled on one contributing factor but also purport to have a product which may be able to free future collegians from the dilemma of whether to follow their dreams or take the “safe route.” Their product, which is none other than a standard human capital contract (HCC), will allow those select few collegians who have the right combination of ambition, drive, and focus to escape the soul-sucking campus recruiting cycle, or the even more soul-sucking process of telling your parents you couldn’t find a job and have to move back in with them for a few weeks months years. (Note: Upstart.com is completely separate and different than Upstartbayarea.org.)

The basics of Upstart are these (and they should sound familiar to anyone who has read my earlier posts on HCCs, because they’re nearly identical) :

1. 

2. 

3. 

What separates Upstart from other HCC vendors I’ve read and/or written about before (e.g. Lumni, 13th Avenue Funding) is its choice of target market. As a financial product, human capital contracts are relatively simple and, for all the reasons I’ve listed before, actually better than analogous debt products when it comes to financing education. From a cultural perspective, however, converting to HCCs as a remedy for out-of-control student debt is actually a pretty tough pill to swallow. In nearly all of the conversations I’ve had with people about human capital contracts, the mention of having students sell a portion of their future income, and the corresponding truth that someone else owns that portion of their future income, consistently elicits the following knee-jerk reaction: “That sounds like indentured servitude.”

In the follow-up to his blog post on New York Times’ Fixes last summer, David Bornstein picks up on this objection and writes:

It’s not clear to me why someone who agrees to sell a portion of his future earnings for a given period of time is being enslaved. The essence of servitude is a loss of freedom. What happens today for many college students who take on student debt is that they get locked into high payments that limit their career options. I’ve met many students who say they would love to spend a number of years after they graduate working for a social-purpose organization, or serving in a program like Teach For America, or trying to start a business — but many of them end up going the corporate route because of their loans. That sounds more like servitude to me.

With human capital contracts, students would have wider options. They would know that, regardless of their career choices, their payments would not be unmanageable. For example, doctors who financed their education this way could feel more comfortable going into lower-paying, urgently needed specialties like geriatrics or serving in low-income communities, where they might earn less; young professionals in many fields could trade off some income for the chance to do work that is more meaningful and potentially more fulfilling.

Well said, David.

However, rationally arguing for why people shouldn’t be creeped out by other people owning a share of their income does not mean that we can then dismiss their being creeped out. As my girlfriend and I prove and re-prove time and again, fighting rationality with emotion (and vice-versa) rarely ends well. Best to let things cool off for a while until you can both speak the same language. (Who knew there would be free relationship advice thrown in here?) Anyway, I would imagine that being uncomfortable with people owning a share of other people’s income has its genesis in our country’s complicated and troubled racial history. And just to be clear: I’m talking about slavery.

When one adopts a more culturally holistic perspective, one can understand why the water might feel uncomfortably warm when a company creates a product that “aims to facilitate buying and selling the shares of low-income students’ future income in order to provide financing for their higher education.” Of course that characterization is quite oversimplified, but it’s not technically inaccurate. In fact, as it pertains to the company I hope one day to start or work for, it’s technically accurate, which is to say, it’s dead on.

As I was saying, Upstart chose a different target market and consequently side-stepped the mine field that is America’s racial history and present. (Yes, I did jump from talking about low-income students to talking about students of color. Unfortunately, race and class are still far too inextricably linked when it comes to educational outcomes.) Upstart, on the other hand, focuses on students who see a more entrepreneurial future for themselves. As Founder Dave Girouard wrote in his company’s inaugural blog post:

We have a surplus of bright young people who want to carve their own way – to take a risk, start something new, and make a difference. They have all the energy and passion you’d expect from people in their twenties. In most cases, they’re yet to be weighed down by the obligations that curtail risk-taking later in life – spouses, kids, mortgages, health, etc. And while not generally creditworthy in the traditional sense, there are clear and measurable signals reflecting their accomplishments and hinting at their potential. Yet we collectively tell them to take the job.

Could we imagine a future where talented grads are given a modest window of economic freedom, combined with the help and support to do what they were really meant to do?

With no explicit social agenda other than to expand opportunity broadly, Upstart may just be the company that introduces HCC-like instruments to the masses. In doing so, the risk of HCC’s “experimentation phase” will be borne by those who are best able to bear it: the risk-takers among us. And when it comes down to it, that’s the essence of financial capitalism.

Upstart is beginning this fall with recruitment efforts at 5 universities: Arizona State, Dartmouth College, Rhode Island School of Design, University of Michigan and University of Washington. A quick review of Upstart’s founding team reveals notable diversity (except with respect to age, but nobody’s perfect!) for what is essential a financial/technology start up (traditionally white and male sectors). Most notable, in my opinion, is the inclusion of Damon Whitsitt as a principal. While nearly all companies’ first priority is sales, Upstart has made the impressive realization that its product is people first, and its platform second. Damon’s background is not in sales and marketing, but rather in staffing (albeit most recently nearly six years in sales and marketing divisions at Google.)

As Upstart gains traction in the marketplace, I expect they will quickly start running into SoFi. I’ve written about SoFi earlier here. Needless to say, the financing options available to students are going to get more complicated before (if ever) they get simpler.

But wait! There’s more! Upstart isn’t the only one trying to get in on the action of helping America’s 20-somethings get a jump start on changing the world. Check out Thrust Fund.  With much the same idea and target profile as Upstart, Thrust Fund, which currently lists only two entrepreneurs seeking funding. Though it should be said that if Jon’s and Saul’s profiles are any indication, Thrust seems to be going for quality over quantity.

Anyway, as always, I’m excited to see if Upstart and Thrust can make strides towards popularizing HCC-like instruments.

What do you want to do with that major?

As I was driving home last week from Richmond (home of Randolph-Macon College, scene of the region’s poshest Division III baseball facility, and Buz and Ned’s, makers of the best barbeque east of The Market), I heard this NPR story about the recent growth in popularity of European-style apprenticeships among high-achieving Charlotte high school grads. The girl featured in the story decided to pass on college, despite promising academic credentials, and accept a four-year apprenticeship offer from Siemens. When she graduates, she’ll have an associate’s degree, a journeyman’s certificate in machining, the guarantee of a $44,000 starting salary, and best of all, no debt. Not a bad deal.

The story reminded me of something I read a long time ago about Bobby Knight (I think it may have been in A Season on the Brink), whose father once told him he didn’t see the point of going to college if he only wanted to be a basketball coach. Obviously there was a point: to learn the game of college basketball by playing college basketball. But the elder Knight’s allusion is hard to ignore. So the question becomes, Why are the things we study so often so unrelated to the things we end up doing for a living? (Doesn’t this seem, on some level, very inefficient?) Well, for starters, probably because most 18-year-olds have no idea what they want to do for a living and pick majors that sound interesting and cool as a result. And then the reinforcement comes, because the message they hear from the people around them (myself included, nearly every day) is that not only is this approach acceptable, it’s great, because 99.9% of people’s careers are unrelated to their majors and there’s no way someone so young should be zeroing in on one career path and you never know where life is going to take you and it’s great to keep your options open and most companies don’t care what you study because they just want to hire smart, well-rounded people and so on. That’s not an entirely bad message; it inspires creativity and big dreaming, valued traits in our culture, and it celebrates the sharpening of the mind through intellectual achievement. But is it possible that this philosophy is doing some young people a sizable disservice in some way? I’d be curious to know how many such supportive, encouraging messages Rebeca Espinal received in response to her precociously shrewd career move, despite the fact that she may not be proudly wearing a new college hoodie at Thanksgiving. Hopefully many.

Snowplows in the Dominican Republic?

About a month ago, I came across a terrific Elizabeth Kolbert article in The New Yorker: “Spoiled Rotten: Why do kids rule the roost?” (As a side note, Kolbert really is a fantastic writer, one of my favorites. I used to teach her book Field Notes From a Catastrophe, an alarming account of the state of global climate change, in a high school physics course. Many students were surprised by how quickly and eagerly they found themselves turning pages to read about science.) Anyway, I hear that the article has received considerable acclaim; Kolbert seems to have hit quite a cultural nerve. I thought it only natural to extrapolate into the world of youth sports.

Citing a variety of sources ranging from a fascinating UCLA anthropologic study of the Matsigenka (a tribe in the Peruvian Amazon known for raising impressively self-sufficient children) to her own parenting experience, including a few failed attempts to help her sons “become a little more Matsigenka,” Kolbert beautifully supports a brutally simple thesis: American kids are spoiled because they don’t do anything, because everything is done for them. She highlights a variety of causes and consequences of this unfortunate truth, including college rankings (pretty interesting argument here, relayed from Hara Estroff Marano’s book A Nation of Wimps),“snowplow parents” (what an image, right?), the rise of the “adultescent,” and the “crap-strewn core of American culture.”

Her article certainly got me thinking about how I coach, teach, and will perhaps one day parent, but I had a brief experience not long after reading it that ultimately made me decide to put pen to paper. Not unlike most days during the summer, I was at a baseball “showcase” (some simple math for those of you unfamiliar with the concept: a lot of high school baseball players hoping to play college baseball + a lot of college coaches watching and taking notes + an army of anxious parents + a lot of money changing hands = a cultural spectacle unlike many others and probably worthy of a separate post), this time at Fordham University, which, by the way, looks like an unbelievably cool place to go to school.

As the morning was just getting started, I was sitting in the first base dugout with the rest of the coaches in attendance, gazing in moderate amusement over at the college baseball hopefuls littering the third base dugout, maybe sixty or seventy of them in all. The coach next to me observed that the players looked unusually timid and anxious as they sat largely in complete silence, barely acknowledging each other as they awaited assessments of their baseball futures. Another coach replied, “It’s because kids can’t function without direction from adults. We could ignore them for the next two hours and they’d just keep sitting there, waiting for us to tell them what to do. If we were in the Dominican Republic right now, we probably would have walked into the stadium in the middle of the second inning of a pickup game more organized than anything we could put together for them.”

His comparison, exaggeration though it may be, is strikingly similar to Kolbert’s. And the message is exactly the same: we need to open our parenting and educating eyes a little bit. We, as a culture, are not great at raising kids. Because I’m not a parent, I realize how it sounds for me to say that. But I assure you that I’m including myself in that assessment; some of my most glaring deficiencies as an educator make me just as much a part of the problem as the parent who buys his daughter two hundred and forty-eight dolls. I’m not proposing we abandon everything we do, because a lot of the child-rearing techniques in this country are good. I’m also not arguing that other cultures have all the answers (see this Time account of the failings of the DR’s youth baseball system). But they have some of them. We just need to be humble enough to look.

Immigration Policy: Time to Remember the Kids

As a high school math teacher in the District of Columbia Public Schools, I work with a majority of students who come from families and communities overlooked by “mainstream” American society. Many are either undocumented immigrants or part of families where only the US-born children have citizenship. Given current immigration policies, such circumstances put these students in extreme situations when it comes to what to do post-high school. While I could have written this post about a number of my students, I want to talk about just one – one who is currently $8,000 short on financial aid for her undergraduate studies.

Her name is Esthela Artiga and she was born in Los Angeles to El Salvadorian parents who do not have US citizenship. Esthela’s parents currently live in El Salvador and she moved to DC without them four years ago, to live with her older sister and younger brother. With her parents living in El Salvador, Esthela is pretty much on her own.

As such, every day after school, Esthela cleans office buildings until 11pm – only after, does she have time to start her homework. Despite this, Esthela graduated among the top students in her class with 3.91 GPA. She completed three AP courses (Calculus, English, and Physics) her senior year, passing two of the three AP Exams this May. Additionally, she has already passed last year’s AP Spanish Exam. All of her academic accomplishments have been thoroughly earned, as every teacher speaks the world of her work ethic, seriousness, and dedication to academics.

Esthela’s outstanding academic work has gained her admission to Ohio State University for the 2012-2013 year, where she is excited to start her work toward becoming a practicing medical doctor. She planned her financial aid perfectly – applying for (and winning) scholarships, qualifying for FAFSA, and winning an OSU grant as well. Esthela also planned on using the DC-TAG Grant – a $10,000 grant given to all DC residents for undergraduate studies at a public university. What she didn’t know about the DC-TAG Grant (and is completely non-existent on the DC-TAG website) is that eligibility is based on not only the student having US Citizenship, but the student’s parents as well. As a result of absolutely nothing she can control, Esthela does not qualify for this grant. Similarly, she fails to qualify for a private loan since she has no family member eligible to co-sign her loan. Because she is $8,000 short, Esthela is now strongly considering other options post-high school, such as community college or a year of work. Esthela’s situation is common for students in her demographic (first generation immigrant with undocumented parents), yet is nevertheless heartbreaking and enraging.

What makes this both heartbreaking and enraging is that Esthela’s situation flies in the face of anything remotely resembling the American Dream and what this country should represent. She has worked hard and played by the rules. She has overcome many obstacles that have been thrown in her way (her parents living in another country and her having to work a full-time job to support herself are two to name a few). Further, she has demonstrated her desire and ability to excel at the university-level. Yet, because of who her parents are, she cannot qualify for the appropriate funding to continue her studies. This is not to say pursuing options other than a four-year undergraduate degree post-high school is bad – continuing individual growth is indeed a personal endeavor and many students blossom into successful adults by taking the community college or year-off path. But when you really think of it, our current immigration policy forces Esthela into this situation because she is a child of immigrants.

While I’m nowhere near an immigration expert, nor up-to-date on the latest immigration policy arguments (teaching does take a lot of time!), I do know that Estela’s situation is bigger than a simple immigration issue. Fundamentally, it is a Civil Rights issue. And until our country begins to hear the stories and see the children – children like Esthela Artiga – who are denied an equal playing field, only then will we make significant strides to combat backwards policies that leave many of our nation’s children undereducated, unmotivated, and ultimately unfulfilled individuals.

So, as we approach November and begin to hear more and more about immigration in our electoral debates, I challenge you to take a step back, and think about how such policies affect children – such as Esthela – and their opportunity to forge unique and prosperous futures.

-Adam Kent

Big Data and Education: A Natural Marriage (and an Unnaturally Hard Topic for Me To Comprehend Fully)

Let me start by acknowledging my own limitations here. I am neither a data scientist, a computer whiz, nor an accomplished researcher. Nevertheless, it seems clear to me that the future of education, particularly when it comes to innovations aimed at increasing overall achievement and access, is going to be driven by those who can most intelligently mobilize the gobs (I’d try for a more technically appropriate word here but it would only serve to underscore further my ignorance) of information that exists out “there” on what works and doesn’t work for individual and groups and students.

[Insert clever lead about Big Data here.]

New to big data? So am I. Let’s start here: right now you’re reading this on your computer or your phone, or some other digital device that has access to the world wide web. Hopefully, you’re also familiar with terms such as megabyte or the even larger gigabyte. In computer speak, a bit is a 0 or a 1, the elemental unit of computer memory or capacity. A byte is a string of 8 bits (e.g. 00001111 or 01010101 or 00000001 or 11101110). From Wikipedia: “Historically, a byte was the number of bits required to encode a single character of text  in a computer, and for this reason it is the basic addressable element in many computer architectures.” A kilobyte is approximately one thousand bytes (actually, it’s 2^10=1024). A megabyte is million bytes or a thousand kilobytes: 2^20. A gigabyte: 2^30.

For reference, consider that all the text on this entire blog is somewhere on the order of a few kilobytes. A typical song in .mp3 format is usually a couple megabytes. And until very recently, even the nerdiest of computer users would rarely speak about volumes of information larger than gigabytes. Now, open your mind to the nearly incomprehensible fact that innovations in digital storage and analysis have allowed us not only to collect and keep but also to search for patterns and hidden insights within terabytes (2^40), petabytes (2^50), exabytes (2^60), zettabytes (2^70) and yottabytes (2^80) of data, the latter few of which sound as if they were made up by Johnny Depp as Keith Richards as Jack Sparrow mocking Harrison Ford as Hans Solo in a Home Star Runner mash up of Pirates of the Caribbean and Star Trek. At least that’s what they sound like to me.

If the math or my pseudo-pop-cultural references don’t assist in your understanding, check out Wikipedia’s Big Data page, this story from February about how Target may know you’re pregnant before you do and Quentin Hardy’s recent NYT article entitled How Big Data Gets Real.

Two recent stories have caught my eye and provoked this post.

1) About two months ago, Civitas Learning publicly announced its launch. Founded by Charles Thornburgh, and funded by Austin Ventures, First Round Capital and Floodgate to the tune of $4.1 million, Civitas has set out to solve this problem:

As colleges and universities strain their resources to accommodate an ever-growing, diverse student body, it becomes increasingly difficult to track the progress of individual students and figure out what’s working in their curricula, coursework, testing, and teaching styles. An appalling number of students in the U.S. are still dropping out before they earn a degree, and despite Mark Zuckerbergian exceptions, attrition means sunk costs for students, difficulties finding jobs, and loan defaults. [from TechCrunch article]

How Civitas aims to help is by employing the same strategies Target, Amazon, and others are already using to try and attract our dollars. Again, per Rip Emson at TechCrunch:

Big data, predictive analytics, machine learning and recommendation engines are transforming the way we buy products, play games and watch movies, and Civitas Learning believes that the same should be true for education.

I’m looking forward to hearing more about CIvitas in the future.

[Side bar: If anyone from Civitas is reading this and you want an MBA intern for next summer, call me maybe?]

2) This NYT article about big data on college campuses. It’s a great article and deserves much deeper treatment, but for now, allow me to skim the surface. Arizona State is the country’s largest university. Not coincidentally, it has also become the country’s (if not the world’s) largest laboratory for applying big data analytics to education:

The new breed of software can predict how well students will do before they even set foot in the classroom. It recommends courses, Netflix-style, based on students’ academic records.

From a human capital contract perspective, these developments are encouraging and exciting. One of the biggest challenges in implementing human capital contracts in any sort of broad manner is appropriately pricing them on a student-by-student basis. Algorithms that can help us effectively and efficiently compare students are a huge step in the right direction.