Can Student-Centered Income Share Agreements Improve Economic Opportunity and Equity?

Over the last five years, income share agreements (ISAs) have emerged as an option for students to finance education and training. Unlike a traditional loan, students pay a fixed percentage of their income over a defined period, and students earning below a specified threshold make no payment. Over 40 U.S. colleges and universities and numerous alternative training providers have offered ISAs to finance education, and new programs are continuing to emerge. This developmental stage opens the opportunity for these institutions to guide the design of ISAs toward a student-centric framework.

These findings and recommendations are illustrated in a new issue brief by the Aspen Institute, which explores how ISAs can be designed and operated to improve economic mobility and opportunity for American workers. The Aspen Institute Future of Work Initiative conducted nearly 40 formal interviews with stakeholders across the ISA landscape, including nonprofit, for-profit, and workforce ISA providers; impact investors; philanthropic organizations; consumer protection advocates; workforce experts; and higher education policy experts. The Initiative then organized a working group of practitioners and policy professionals to discuss policy guardrails and student-centered ISA principles. As a partner of the Aspen Institute, Social Finance was grateful to participate in the working group to develop the report.