Students’ Futures as Investments

Income-share agreements (ISAs) are an emerging idea for helping students pay for college. Under an ISA, investors provide upfront sums of money toward students’ college tuition and other associated costs in exchange for a fixed percentage of the recipients’ earnings after graduation. This paper provides an in-depth look at the ISA industry, detailing the potential of ISAs as a new and innovative financial-aid mechanism, exploring the offerings of emerging providers, and outlining several impediments to growth. While exploring the topic from a high level, the paper also conveys the perspective of some of the few students who have received ISAs and of several providers already offering them. It concludes with a discussion of what is next for ISAs, such as possible industry developments—including Purdue’s new initiative and other providers’ plans—and a flurry of legislative activity.