Are income share agreements misleading student loan borrowers? A new federal complaint says “yes.”
Here’s what you need to know.
Student Loans
It’s no secret that college is expensive. The latest student loan debt statistics show that 45 million borrowers collectively owe $1.6 trillion of student loan debt. Are there alternatives to student loans? Income share agreements, or ISA’s, have been hailed as one alternative to student loans. Rather than borrow a student loan, ISA’s enable students to defer the cost of college in exchange for a fixed percentage of their post-graduation income for a fixed period of time. Would you give up a percentage of your future income to pay for college? Before making that decision, two non-profit organizations filed a complaint today with the Federal Trade Commission against Vemo Education for unfair and deceptive business practices related to its income share agreements. Vemo markets income share agreements at multiple colleges such as Purdue University as well coding bootcamps where borrowers may not qualify for student loans.