The headline of an article on the political news website features the following quote, attributed to New Jersey governor and one-time presidential hopeful Chris Christie: “College Girls Can Sell Themselves To Pay Tuition.”

Our readers know all too well that today’s  Republican Party  is a “clown car.” The passengers include (among other types), misogynists, Mussolini-type corporatists, theocrats, psychotics and a wide range of delusional individuals. Christie certainly fits in with this crowd, but did he really suggest that young women prostitute themselves in order to finance their college education?

Not exactly. It depends on one’s definition of “prostitution.” In a literal sense, Chris Christie did not suggest that female college students become sex workers in order to cover tuition costs. What he did suggest is that college students sell “stock” in themselves to investors, as if they were “corporate” rather than “natural” persons. After graduation, these students would provide their “investors” with returns based on a percentage of their income. He calls these “human capital contracts.”

Christie is not the originator of this concept. Nor is he the first Republican politician to embrace such an idea.  One advocate of this model was Senator Marco Rubio, himself a virtual “pimp” for now-defunct Corinthian Colleges. A disciple of the late, unlamented Ayn Rand, Rubio describes it as a true “free market solution” that would “expand choices.”

On the surface, human capital contracts seem like a reasonable and workable idea.  As always, however, the devil is in the details.

The idea was first tried at Yale University in the 1970s (back before tuition rates had exploded). The program was called the “Tuition Postponement Option.” It was the brainchild of arch-Libertarian Milton Freedman of the Chicago School of Economics, along with his colleague, James Tobin.

According to a 1999 article in the New York Times, approximately 3,900 students participated in this program.  For every $1,000 a student borrowed, s/he pledged four percent of their income for the next 35 years – or until the student’s entire graduating class had repaid all of their outstanding loans.

The problem with the program was the assumption that most graduates would do well. It was also assumed that graduates in more lucrative professions – corporate CEOs, plastic surgeons, bankers and such – would carry the burden for those going into lower-paying careers, such as education and missionary work. It didn’t quite work out that way.

One-fifth of graduates wound up defaulting on their payments. Not one graduating class between 1971 and 1978 was able to repay the  loans. Eventually, Yale University canceled the loans and the program was declared a failure.

One criticism of human capital contracts was put forth by Michael Simkovic of the Social Science Research Network in 2013. According to Simkovic, such a system would contribute to “moral hazard” by encouraging borrowers to sacrifice earning potential, long hours and hard, potentially unpleasant work for lower-paying, less stressful careers.

What a nightmare for the Powers That Be who want us all with our noses to the grindstone!

Some of these “human capital contract” programs are still floating around. For many reasons, however, it’s failing to catch on. One reason is the lack of regulation; there is virtually nothing in the way of a legal framework that would set the rules and provide protections for borrowers.

Of course, politicians like Christie and Rubio would prefer it that way.



K.J. McElrath is a former history and social studies teacher who has long maintained a keen interest in legal and social issues. In addition to writing for The Ring of Fire, he is the author of two published novels: Tamanous Cooley, a darkly comic environmental twist on Dante's Inferno, and The Missionary's Wife, a story of the conflict between human nature and fundamentalist religious dogma. When not engaged in journalistic or literary pursuits, K.J. works as an entertainer and film composer.