DAVID GONZALEZ: Income Share Agreements offer solutions to student debt crisis

By DAVID GONZALEZ
Guest Columnist

How many family members, friends or colleagues have you heard justly complain about the crippling student loan debt they are facing? The odds are significant considering one in every four Americans is struggling to pay off college tuition.

GONZALEZ

As a professor, I fully recognize the importance of earning a diploma from a four-year institution. It’s viewed by many employers as a staple for high-paying careers and used as a necessary steppingstone for those seeking to attend many graduate school programs.

The traditional education route has its place in society but it’s not for everyone, especially those who are not equipped to take on the financial commitment.

Income Share Agreements (ISA’s) are a promising solution that reverses the student loan model by offering a free education upfront.

This notable investment program is gaining popularity across the country and for good reason. According to Forbes, the United States has incurred $1.5 trillion in student loan debt with the average student paying off $40,000 in debt. A college degree should not come with a lifetime price tag that slows down the path to important milestones like buying a home or starting a family.

Purdue University recognized the benefits of an ISA program and started the “Back a Boiler” fund that gives students the opportunity to earn a degree without the weight of loans following them around for the foreseeable future.

The success of education programs that offer ISAs directly depends on the success of its graduates. In layman’s terms: if I win, you win. This system fosters a student-oriented learning environment that heavily focuses on the real-world application of skills.

Non-traditional education programs such as the Wisconsin-based devCodeCamp, a 12-week full-stack web development program, have entered the ISA space.

DevCodeCamp recently introduced the first ISA program to Wisconsin. This coding bootcamp offers students free tuition that is paid back with a small percentage of their salary once a graduate is employed and earning at least $40,000 a year. Tuition payments are capped at $30,000 and graduates would not have to continue making payments if he or she drops below the $40,000 salary mark.

This system gives students the option to eliminate the debt that individuals feel forced to incur for job security.

Additionally, ISAs garner the most success when they are invested in a niche market. One of the most starved job markets in the United States is the tech industry, where there are half a million jobs waiting to be filled with professionals skilled in computer science.

A degree from a traditional university is important for success in countless careers and continues to play a vital role in today’s society. However, as our economy continues to change, our education system must adapt and change with it. ISAs are certainly helping to do exactly that.

David Gonzalez is an assistant professor of public administration and organizational leadership with Brandman University’s School of Business & Professional Studies. He wrote this for InsideSources.com.

 

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