Are Income Share Agreements the Answer to College Debt?

Student loan debt has become the talk of the political town as we approach Election Day. Candidates running for everything from president to school board have ideas on how to solve the nation’s student debt crisis.

The Green Party’s nominee for president wants to absolve all student debt if elected and Hillary Clinton–the presumptive nominee on the Democratic side–has a plan to sink $350 billion dollars into the hole in an attempt to plug it.

When it comes to finding solutions for the crisis, we swing like a pendulum as to how we may resolve the main problem of the debt crisis.

But one way that’s gaining popularity is that of Income Share Agreements (ISA). Students who take out loans to attain a degree that may be deemed worthless in the workplace are saddled with massive amounts of debt that they are unable to pay back.

This causes many to default on their loans and fall down an income hole that detaches them from the ability to obtain credit to purchase a home, vehicle, and etc…

Because it’s tough to section these students off–those who may be in danger of gaining a degree that’s economically barren–some may be eligible to take out an ISA loan.

These loans allow the student to pay back the cost of their degree in terms of its value. So if one student has a degree that has little to no worth, he or she will have a small amount, if any, to repay.

Inversely, if a student’s degree turns out to be of much value, then that student will pay back more.

Ostensibly this seems like a good deal for students. It’s affordable, colleges and universities seem open to it, and Congress is exploring ways to create a regulatory environment for ISAs.

Hopefully, once properly researched and vetted, the application of these loans are a win for students as the cost of tuition and school fees continue to rise.

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