As Vemo tries to enter with colleges regarding income-participation agreements, a former D.C.-Policy-Wonk is working to directly offer ISAs to students in a handful of Midwestern cities — Chicago, Milwaukee and Twin Cities. Kevin James, CEO of Better Future Forward, addresses contracts for low-income students on a short list of colleges with relatively strong academic results. In addition to the benefits, there are also many potential ISA-related problems, as well as countless outstanding issues. The most direct question is how these treaties are and should be treated legally. The ISA model, published publicly by Purdue University, one of the first major national universities to adopt an ISA program, states that it is “not a loan, nor is it another instrument of debt or credit” or “a salary transfer.” On the contrary, “it is your obligation to pay a certain percentage of your future professional income.” From a legal point of view, there is little more clarity. Will it be treated like a standard student loan? What are the limits on duration and “borrowed amounts” and amounts repaid? What information do lenders require under an ISA? Is she capable of going bankrupt? Should there be supervision on the part of the federal state or the federal states? None of these questions have a definitive answer at this time. For example, if you join a university that limits your payment to 25,000, you may well have a six-figure annual job and reach the maximum in just five to six years. Compared to traditional student loans that create interest rate agreements, they will not grow if you re-use your “debts.” They will be set by appointment will remain the same during your ISA. If you earn more, increase your payment, but your ISA will be paid sooner. For example, a university may offer access to four years of its bachelor`s program in exchange for 3% of students` income for 5 to 10 years. As a general rule, income share agreements, only takes effect if the borrower is able to secure an employment opportunity after the conclusion, which amounts to a minimum wage. In fact, the data show that for the vast majority of university graduates, going to university is driving you forward.
But in the face of rising higher education costs and a huge financial burden on young adults around the world, it is time to think about how we fund education and shape the future of work. From a civic point of view, is there a risk that ISAs will change and ultimately determine the value of training? Will a university with years of hard data with which it can work calculate the same cycle of study for a degree in economics, engineering or pre-med as for philosophy or archaeology? Will it devalue certain professions and discourage the various potential creators in such fields? What will happen to general education and our social and political leaders? What will happen to our society and culture if Wall Street refuses to fund poetry and art courses and higher education institutions can no longer afford to offer them? What is knowledge worth? Some fear that ISAs will have the effect of “creaming” the best students and funding only elite institutions.