Home News Report examines how colleges use income-share agreements – Education Dive

Report examines how colleges use income-share agreements – Education Dive

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Dive Brief:

  • An emerging way to finance tuition, income-share agreements (ISAs) show promise for improving college access, retention and completion, but consumer protection guardrails are essential, argues a new paper from the Federal Reserve Bank of Philadelphia.
  • Through ISAs, students receive financing for their programs upfront and typically agree to pay it back as a share of their income over a set period of time once their earnings reach a certain level.
  • More than 40 colleges, as well as “numerous” other education providers, offer ISAs, the report notes, and interest in them is growing as the sector grapples with how to address the nation’s ballooning student debt load.​

Dive Insight:

Advocates of ISAs say they offer students a lower-risk alternative to certain loans, while critics argue they aren’t that different from debt and don’t force colleges to address their rising costs.

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