Purdue's new approach to student loans (Income Share Agreement)

[deac_tracy]

http://www.pbs.org/newshour/bb/purdue-invests-students-futures-new-model-financing/

HARI SREENIVASAN: President Mitch Daniels says the new funding model, called an income share agreement, can be viewed as an investment, much like investing in the stock market.

MITCH DANIELS: Unlike student debt, it shifts the burden — or the risk, I should say — entirely from the student to the investor.

HARI SREENIVASAN: That’s because the terms of the agreement, called an ISA, are made well before students launch their careers. So, even if a student ends up in a low-paying job, the pay-back percentage stays the same.

MITCH DANIELS: If the student’s career doesn’t pan out too well during those early years, then the student is not on the hook and the loss falls on the investor. The investor is banking on the fact student is going to do well. And they’ll get their money back and maybe a little more.

Only 160 people enrolled so far. More information of the program here

https://www.purdue.edu/backaboiler/overview/index.html