No, This is Not a Joke

Photo by @TimGouw

By Darren Katz, Founding Partner

In a story that seems plucked straight from The Onion, there is a new way for students to finance college education called income share agreements (ISAs). The crux of these agreements is that funders essentially agree to loan students the money for college in exchange for a share of their future earnings.

As you would expect, the terms of the ISA is determined not by the credit worthiness of the borrower, but rather the attractiveness of the college and degree. The dystopian problems with this loan “product” are myriad.

First, it commodifies the college experience to simply an investment transaction. This denudes everything about educations to how much money one can make upon graduation.  Second, it further marginalizes students who can’t afford elite colleges by increasing their borrowing costs.

Finally, the fact that we are even having this conversation highlights the ridiculousness of US higher education. The exorbitant costs of college combined with flat wages for most Americans is the real scandal that needs to be addressed.