Income Share Agreements Nytimes
In recent years, Income Share Agreements (ISAs) have gained popularity as an alternative to traditional student loans for financing higher education. The New York Times recently covered this topic in an article titled “Investors Bet on Graduates’ Earnings, and Both Profit.”
So, what exactly are ISAs? In simple terms, they are financial agreements where an investor provides funds to a student to pay for their education, in exchange for a portion of their future earnings after graduation. The idea behind this is to reduce the financial burden on students and align the incentives of the investor with the student`s career success.
The NY Times article highlights a few key players in the world of ISAs, including Lumni, a company that funds students in exchange for a percentage of their income for a set number of years after graduation. This model is particularly attractive to students who are seeking education in fields that have a higher earning potential, such as computer science or engineering.
However, ISAs are not without their criticisms. Some argue that they are a form of indentured servitude, as students are essentially pledging a portion of their future earnings to an investor. Others worry about the lack of regulation surrounding ISAs and the potential for exploitation of vulnerable students.
Despite these concerns, ISAs have the potential to be a viable option for students who are looking for ways to finance their education without taking on crippling amounts of debt. As the NY Times article notes, many investors are betting on the success of ISAs and are willing to take on the risks associated with them.
If you are considering an ISA for your higher education, it`s important to take the time to research different providers and understand the terms of the agreement thoroughly. As with any financial decision, it`s critical to weigh the potential benefits against the risks and make an informed decision that`s right for your future.