Behind the Bumper Sticker: Income Share Agreements

As national student loan debt figures continue to rise, some policymakers and institutions of higher education have started to think about alternative methods to finance a college education. One idea that’s grabbed a lot of headlines over the last few years is the concept of Income Share Agreements (ISAs). But what exactly are “ISAs”? How would they work? What are the possible upsides and downsides of experimenting with them in different ways and for different kinds of students? And most importantly, should there be a federal role in the development and administration of ISAs for college-going students?

To find out the answers to these questions and more, Third Way hosted a lunchtime panel discussion on Capitol Hill at the sixth installment of our “Behind the Bumper Sticker” event series. The conversation, moderated by Terri Taylor, Strategy Director for Postsecondary Finance at the Lumina Foundation, assessed the benefits, levied the risks, and addressed the possible role of the federal government in providing oversight of ISAs as a financing option for students. Taylor was joined by Dr. Matt Gianneschi, Chief Operating Officer and Chief of Staff at Colorado Mountain College, Joanna Darcus, staff attorney at the National Consumer Law Center, Clare McCann, Deputy Director for Federal Higher Education Policy at New America, and Ethan Pollack, Associate Director of Research and Policy for the Future of Work Initiative at the Aspen Institute.

The conversation touched on the potential benefits of ISAs, including their ability to fill a gap in funding for students who cannot access current federal financial aid, such as the Fund Sueños program Dr. Gianneschi is helping to pilot at Colorado Mountain College for undocumented students. However, panelists also discussed the potential risks of opening up ISAs, especially given the lack of guardrails and regulations that currently exist to stem predatory behavior, as well as the nationwide inconsistency in the implementation of existing ISAs. For some, this was the reason why it seems necessary for the federal government to play a role in administering ISAs themselves, while others worried that the introduction of another federal financing option will only compound problems with existing student debt.

Watch the video below for the full recap of the discussion and be on the lookout for our next installment of #BehindTheBumperSticker by following us on twitter @ThirdWayEDU. And please reach out via social media or directly to our Education Events Coordinator, Chelsea McKelvey ([email protected]), if you have ideas about what topic you’d like to see covered next!