Oregon Income Share Agreement: A New Way to Fund Higher Education
The cost of higher education is skyrocketing, leaving many students burdened with student loans for years after graduation. In Oregon, a new option is emerging to help students avoid the burden of student loans and pay for their education in a more affordable way: the income share agreement (ISA).
What is an income share agreement?
An income share agreement is a financial agreement between a student and an investor. Instead of taking out a traditional student loan, the investor provides the student with funding in exchange for a percentage of their future income for a set period of time after they graduate and enter the workforce.
How does it work?
The specifics of an ISA vary by institution, but generally, a student will apply for funding through the program and undergo an assessment of their academic and career potential. If accepted, the program will provide them with a set amount of funding in exchange for a percentage of their future income. The percentage and length of time can vary based on factors such as the field of study and job prospects.
What are the benefits?
For students, an ISA offers several benefits over traditional student loans. First, they don`t have to pay anything upfront to attend school, so it can be a more affordable option. Second, the repayment amount is based on their future income, so if they struggle to find work after graduation, they won`t be burdened with high monthly payments. Third, if they become successful in their career and earn a high income, the repayment period could be shorter than the term of a traditional student loan.
For investors, an ISA can be a way to earn a return on their investment while also helping students access higher education. They also have the potential to earn more than they would with traditional investments.
Can anyone apply?
Currently, the Oregon Income Share Agreement program is only available to students attending community college or university in the state. However, other organizations are starting to offer ISAs to students across the country.
Is it worth it?
Like any financial agreement, whether an ISA is worth it depends on the individual circumstances. Students should weigh the potential benefits and drawbacks, such as the length of repayment and the percentage of future income they will have to give up, before deciding if an ISA is the right choice for them.
Overall, the Oregon Income Share Agreement program offers a new way for students to finance their education without taking on the burden of student loans. It`s an option worth considering for those looking for a more affordable way to attend college or university.