Jun 2017

Profiling The Rise Of Income Share Agreements In Higher Ed

Intrigue with new models of student financial aid that encourage innovation in postsecondary education and align the incentives of institutions with the interests of students is growing.

In particular, Income Share Agreements (ISAs), which collect a set percentage of a student’s future income as opposed to putting a student into debt, are attracting considerable attention.

But ISAs are a nascent vehicle. Although their potential to address the issues of access, risk sharing, program quality, and education innovation is significant, there is considerable uncertainty around them. As a nascent and fast-evolving category, documentation and categorization of the players in this new ecosystem have been hard to come by.

This current state of ISAs is what spurred a new report, “The Future of Student Aid: Advancing New Models to Expand Access, Improve Quality, and Spur Innovation in Education,” which I coauthored with Amber Laxton at Entangled Solutions.

The report fills in a, to this point, missing picture of the state of the ISA market. The picture includes descriptions of the emerging players, as well as a clear-sighted view and market map of how ISAs fit into a larger ecosystem of student aid options and private borrowing models. Included in the depiction of the larger ecosystem of student aid options is a detailed listing of the players, what they offer, and how their offerings compare to each other, including what interest rates and terms private loan providers offer and how all the different financing vehicles stack up against each other.

Market map of how Income Share Agreements fit into the larger ecosystem of student-aid options.


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