By Owen Daugherty, NASFAA Staff Reporter
Income-share agreements (ISA) are on the rise, growing in popularity as more institutions look for innovative ways to help their students pay for the cost of their education without getting bogged down by student loan debt.
However, relatively little is known about the programs as institutions look to implement them, with only a handful of schools adopting the practice and the federal government yet to provide rules or regulations for how they operate.
In the latest session of NASFAA’s 2020 Summer Training Series, Rebecca Flake, a higher education services advisor at Cooley LLP, and Melanie Evans, program manager for professional schools in the financial aid office at the University of Utah, provided an overview of ISAs and covered best practices for institutions setting up and administering an ISA program.
Flake explained the benefits associated with ISAs, which allow students to repay a percentage of their income after they graduate for a fixed period of time. She noted that more schools have been implementing these types of programs over the past few years, adding that an ISA can serve as a sign that an institution stands behind its product — in this case the education the student receives.
Evans, who helps oversee the University of Utah’s ISA program, said it benefits her school to have one in place because students at the university are very debt averse and will decrease credit hours or stop attending altogether to avoid accumulating debt.
She added that it took a comprehensive, university-wide effort to launch the ISA, requiring input and assistance from everyone at the school.
“For the students that it helps, they are very grateful they have the option, rather than having to take out a loan,” Evans said.
For those who missed the webinar and wish to view it on-demand or register for future sessions in NASFAA’s Summer Training Series, you can still do so online.
Publication Date: 7/2/2020