“We are designing revenue participation agreement programs to complement some of the strategic objectives identified,” deSorrento said. Many colleges and universities conduct evaluations of their programs based on student outcomes in order to be worthy of their accrediting bodies. Income participation agreements further promote transparency, because students need positive results from their colleges and universities to get a job that helps pay for their contribution to the income contribution. Because Vemo develops income-participation agreements for each institution, repayment obligations vary. DeSorrento stated that adapting ISAs to each college`s objectives is an advantage of the business model. This is the basic idea of income Share Agreements or ISAs. The concept of an income participation agreement is not new. It has been in existence since the 1950s, when economist Milton Friedman presented it as a repayment model. However, the implementation of ISAs is new, as student credit defaults increase and schools try to offer other ways to help their students pay for their education. This article examines how the anti-discrimination framework, which undersied federal and regional fair credit laws, applies to ISAs, with a particular focus on the Equal Credit Opportunity Act. Although ISA has chosen to be a solution to the student debt crisis, the characteristics of existing ISAs are likely to exacerbate inequality.
More than 5 years ago, in episode 45 of Money for the Rest of Us, I introduced participation agreements to partially fund the university. An income participation contract is a contract by which individuals agree to pay a certain percentage of their income for a certain period of time in exchange for a down payment normally used to finance education costs. But can be used for other things. However, there are significant differences of opinion on good federal oversight. Vemo supports the bipartisan laws introduced by young in July that would place ISAs under the responsibility of the Consumer Financial Protection Bureau. However, consumer advocates believe that the Ministry of Education also has a role to play in monitoring contracts. And Darcus argues that Senate legislation essentially provides exceptions in existing plans for income-participation agreements. Income participation agreements are a unique funding option for universities, which could be a cost-effective strategy for some students. Of course, they`re not for everyone – you may end up paying less to go with a federal student loan with its low interest rate. Weigh the pros and cons of your career plans to see if an ISA is useful. An Income Participation Agreement (ISA) is a way to pay for post-graduation university education by a percentage of the salary earned instead of using a traditional student loan. The significant but often untapped value of mutual assistance between graduates (opinion) This paper examines the industry`s argument that ISAs are “not credits” and that, therefore, federal consumer protection legislation does not apply.
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