Oregon Proposes Novel Investment Approach to Student Tuition
By: Robert Spence
College is supposed to be one of the best times of your life, and typically it is. It’s after college when you start paying back student loans that it becomes a real nightmare. According to a Fidelity survey of 750 college graduates, the average college debt is about $35,000 per student. In just the last 30 years, tuition for college has increased a mind-boggling 1,210 percent.
The state of Oregon has proposed a radical investment approach to loans, offering free tuition at public universities in exchange for three percent of earnings for the first 25 years after graduation. The “Pay it Forward, Pay it Back” plan would essentially allow students to enroll with no money down, so long as they agree to pay up to three percent of their future salaries back into a state fund annually. Additionally, no payments would be collected from graduates unless they are gainfully employed, which means they’d be off the hook while in graduate school or out of work.
“If it’s done correctly it’s essentially creating a social insurance vehicle for enabling access to higher education,” said John Burbank, executive director of the Economic Opportunity Institute, the Washington state-based think tank that helped come up with the idea.
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However, critics of higher education, especially venture capitalist Peter Thiel, have long argued that college simply isn’t worth the price tag:
“Probably the only candidate left for a bubble – at least in the developed world (maybe emerging markets are a bubble) – is education. It’s basically extremely overpriced. People are not getting their money’s worth, objectively, when you do the math.
Students are clearly driving the push for tuition reform across the country, as the nation grapples with its $1 trillion debt load. State funding for schools has been slashed left and right as more and more students turn to student loans to fill the gap.
Surprisingly, Oregon’s proposal isn’t entirely a new idea. According to the New York Times, Nobel Prize-winning economist Milton Friedman came up with the idea back in 1955. Yale University piloted it for their first own students before the introduction of federal loans.
So far, Oregon is the only state to really make moves to put such a plan in place. Lawmakers unanimously approved a committee to develop a pilot program for Pay it Forward, Pay it Back, but it would be at least until 2015 before they decide to move ahead or not.
Dell to sell cloud-based iPaaS Boomi in US$4bn deal
Global investment firm Francisco Partners and private equity platform TPG Capital have entered into an agreement with Dell Technologies to acquire cloud-based integration platform as a service provider Boomi in a cash deal valued at US$4bn. The deal is expected to complete this year.
“Boomi has flourished as part of Dell Technologies, growing exponentially since we acquired them in 2010. This proposed transaction positions Boomi for its next phase of growth and is the right move for both companies, our shared customers and partners,” said Jeff Clarke, vice chairman and chief operating officer of Dell Technologies.
“For us, we're focused on fuelling growth by continuing to modernise our core infrastructure and PC businesses and expanding in high-priority areas including hybrid and private cloud, edge, telecom and APEX. All designed to help organisations thrive in the do-from-anywhere economy.”
Dell’s Boomi sell-off follows VMware spin-off
This announcement comes just two weeks after Dell said it would spin-off its 81% equity ownership of VMware to form two standalone companies. This would result in an expected US$9.3bn cash dividend payment to Dell, which says it will use those funds to pay down debt.
When Dell acquired Boomi in 2010 for an undisclosed fee, Boomi offered the industry’s only pure SaaS application integration platform, powered by its revolutionary AtomSphere technology. Dell saw Boomi as addressing one of the top barriers to cloud adoption at that time, which was managing and integrating cloud-based applications with existing applications and databases.
Now, Boomi has more than 15,000 customers globally and is still seen as a leader when it comes to organisations connecting applications, processes and people across a range of locations and devices – a process that can take weeks rather than months.
“I am incredibly proud that through innovation, passion and relentless execution, the Boomi team has created a unified platform for the modern-day hybrid IT landscape that thousands of customers worldwide depend on to digitally transform their business,” said Chris McNabb, chief executive officer of Boomi.
“By partnering with two tier-one investment firms like Francisco Partners and TPG, we can accelerate our ability for our customers to use data to drive competitive advantage. In this next phase of growth, Boomi will be in a position of strength to further advance our innovation and market trajectory while delivering even more value to our customers.”
Francisco Partners has invested in more than 300 technology companies since its launch 20 years ago and has more than US$25bn in assets under management.
“The ability to integrate and connect data and workflows across any combination of applications or domains is a critical business capability, and we strongly believe that Boomi is well positioned to help companies of all sizes turn data into their most valuable asset,” said Dipanjan Deb, co-founder and chief executive officer, and Brian Decker, partner, at Francisco Partners
Nehal Raj, partner, and Art Heidrich, principal, at TPG Capital added: “The need for automation and data integration across applications has never been greater. Boomi's cloud-native platform enables enterprises to streamline business processes and is essential for driving digital transformation.”