NowComment
2-Pane Combined
Comments:
Full Summaries Sorted

A new way emerges to cover college tuition. But is it a better way?

Author: Danielle Douglas-Gabriel

Douglas-Gabriel, Danielle. “A New Way Emerges to Cover College Tuition. But Is It a Better Way?” The Washington Post, WP Company, 31 Dec. 2017, www.washingtonpost.com/local/education/a-new-way-emerges-to-cover-college-tuition-but-is-it-a-better-way/2017/12/31/6519d100-d9c9-11e7-b859-fb0995360725_story.html.


0 General Document comments
0 Sentence and Paragraph comments
0 Image and Video comments


Nestled along the San Diego coastline, Point Loma Nazarene University is a world away from Wall Street. But the Christian liberal arts college is at the forefront of financial innovation.

New Thinking Partner Conversation New Conversation
Paragraph 1 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 1, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 1, Sentence 2 0
No sentence-level conversations. Start one.

Last fall, Point Loma began offering some of its 4,500 students money to pay for college in exchange for a percentage of their future earnings. The model, known as an income share agreement, requires colleges and students to take a chance on each other, a shared responsibility that attracted Point Loma.

New Thinking Partner Conversation New Conversation
Paragraph 2 0
profile_photo
Dec 12
2020 Isabella DiNardo 2020 Isabella DiNardo (Dec 12 2019 9:52AM) : Introduces solution one school has implemented
New Thinking Partner Conversation New Conversation
Paragraph 2, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 2, Sentence 2 0
No sentence-level conversations. Start one.

"It sends a message to the student that we're in this with you," said George Latter, vice president of finance and administrative services at Point Loma. "And unlike a grant, you have the prospect of these funds coming back in and creating a revolving form of financing."

New Thinking Partner Conversation New Conversation
Paragraph 3 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 3, Sentence 1 0
profile_photo
Feb 5
Nicolette Miller Nicolette Miller (Feb 05 2021 8:13AM) : I think this quote is a powerful piece of support that this author used to represent the viewpoint of Point Loma.
New Thinking Partner Conversation New Conversation
Paragraph 3, Sentence 2 0
No sentence-level conversations. Start one.

[Investors buying shares in college students: Is this the wave of the future? Purdue University thinks so.]

New Thinking Partner Conversation New Conversation
Paragraph 4 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 4, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 4, Sentence 2 0
No sentence-level conversations. Start one.

Income share agreements, commonly called ISAs, have generated a lot of buzz since Purdue University introduced its program in 2016. A handful of small companies and nonprofits have piloted programs or offered contracts, with the model gaining the most traction with short-term training programs. But traditional colleges and universities have lagged behind. Until now.

New Thinking Partner Conversation New Conversation
Paragraph 5 0
profile_photo
Dec 12
2020 Isabella DiNardo 2020 Isabella DiNardo (Dec 12 2019 9:53AM) : Other schools have followed this example, and are using ISA's as well.
New Thinking Partner Conversation New Conversation
Paragraph 5, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 5, Sentence 2 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 5, Sentence 3 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 5, Sentence 4 0
No sentence-level conversations. Start one.

Several private colleges are exploring income shares, according to Vemo Education, a Reston, Va., financial services firm that helps create the contracts. In the last month alone, Lackawanna College in Scranton, Pa., and Clarkson University in Potsdam, N.Y., have entered the market.

New Thinking Partner Conversation New Conversation
Paragraph 6 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 6, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 6, Sentence 2 0
No sentence-level conversations. Start one.

Some schools — including Point Loma, Lackawanna and Clarkson — are using their own money, while others are working with outside capital. The schools are tailoring agreements to meet the needs of their students, and in the process they are addressing some of the concerns surrounding ISAs.

New Thinking Partner Conversation New Conversation
Paragraph 7 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 7, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 7, Sentence 2 0
No sentence-level conversations. Start one.

As adoption of the model expands, it could shift financial aid beyond loans and grants. But some student advocates worry that the concept does nothing to make college more affordable and could prove just as harmful as any other form of debts.

New Thinking Partner Conversation New Conversation
Paragraph 8 0
profile_photo
Dec 12
2020 Isabella DiNardo 2020 Isabella DiNardo (Dec 12 2019 9:55AM) : Counter-argument against ISA's Could potentially cost just as much as student loans. [Edited]
profile_photo
Feb 5
Nicolette Miller Nicolette Miller (Feb 05 2021 8:15AM) : I like how you identified the counter-argument, because showing both sides makes the article seem more credible and applicable to a wider range of people.
New Thinking Partner Conversation New Conversation
Paragraph 8, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 8, Sentence 2 0
No sentence-level conversations. Start one.

"I'm very concerned if we are saying it's a positive that on top of people coming out with federal students loans to repay, we're going to take another bite out of their income by adding an ISA obligation," said Jessica Thompson, policy and research director at the Institute for College Access & Success, an education nonprofit.

New Thinking Partner Conversation New Conversation
Paragraph 9 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 9, Sentence 1 0
No sentence-level conversations. Start one.

The market for income share agreements is largely unregulated. Two bills were introduced in 2017 in Congress to create a legal framework. They would have capped the maximum amount a student must repay and barred funders from demanding payment when the borrower's income falls below 150 percent of the poverty line ($18,090 for an individual in 2017). Both stalled in committee, but supporters say they advanced the conversation about the importance of regulation to protect students and investors.

New Thinking Partner Conversation New Conversation
Paragraph 10 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 10, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 10, Sentence 2 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 10, Sentence 3 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 10, Sentence 4 0
No sentence-level conversations. Start one.

Income shares resemble traditional loans in that students are obligated to repay at least a portion of the money they receive. But unlike a student loan, no interest accrues and the obligation ends after a set time.

New Thinking Partner Conversation New Conversation
Paragraph 11 0
profile_photo
Dec 12
2020 Isabella DiNardo 2020 Isabella DiNardo (Dec 12 2019 9:56AM) : Addresses student loans, and states why ISA's are more effective.
New Thinking Partner Conversation New Conversation
Paragraph 11, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 11, Sentence 2 0
No sentence-level conversations. Start one.

Imagine two students, each agreeing to pay 5 percent of their income for five years on a $10,000 agreement. If the first student lands a $30,000 job after graduation, he could pay a total of $7,500 by the time the contract is up. But if the second student scores a $60,000 job, she could end up repaying $15,000. Both could pay more if they get raises along the way, which could make an ISA more expensive than a traditional loan.

New Thinking Partner Conversation New Conversation
Paragraph 12 0
profile_photo
Dec 12
2020 Isabella DiNardo 2020 Isabella DiNardo (Dec 12 2019 9:57AM) : ISA's may also be more expensive depending on the type of job.
New Thinking Partner Conversation New Conversation
Paragraph 12, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 12, Sentence 2 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 12, Sentence 3 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 12, Sentence 4 0
No sentence-level conversations. Start one.

As a result of the earnings differential, most investors would probably prefer students studying engineering, economics or other lucrative fields, placing those pursuing liberal arts degrees at a disadvantage.

New Thinking Partner Conversation New Conversation
Paragraph 13 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 13, Sentence 1 0
No sentence-level conversations. Start one.

[At Purdue, student aid based on future earnings could revolutionize college debt]

New Thinking Partner Conversation New Conversation
Paragraph 14 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 14, Sentence 1 0
No sentence-level conversations. Start one.

In Purdue's "Back a Boiler" program, students in high-earning majors pay a lower percentage of their income for a shorter period than those with lower earning potential. No student pays more than 2.5 times the amount of money they received and the public college in West Lafayette, Ind., only collects from graduates earning more than $20,000 a year.

New Thinking Partner Conversation New Conversation
Paragraph 15 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 15, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 15, Sentence 2 0
profile_photo
Dec 12
2020 Isabella DiNardo 2020 Isabella DiNardo (Dec 12 2019 10:01AM) : Guidelines of ISA collection

The 463 Purdue students who have accepted about $6 million through income shares come from 117 different majors, though most are in science- or math-related fields, according to the university.

New Thinking Partner Conversation New Conversation
Paragraph 16 0
profile_photo
Dec 12
2020 Isabella DiNardo 2020 Isabella DiNardo (Dec 12 2019 9:58AM) : ISA's seem be more effective with students in fields such as science or math [Edited]
New Thinking Partner Conversation New Conversation
Paragraph 16, Sentence 1 0
No sentence-level conversations. Start one.

"If you're making a bet on students by their major, there's a chance of reinforcing existing inequalities," said Mark Huelsman, a policy analyst at Demos, a liberal think tank. "There are massive racial disparities in returns on a college degree."

New Thinking Partner Conversation New Conversation
Paragraph 17 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 17, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 17, Sentence 2 0
No sentence-level conversations. Start one.

[Racial disparities in college major selection exacerbate earnings gap]

New Thinking Partner Conversation New Conversation
Paragraph 18 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 18, Sentence 1 0
No sentence-level conversations. Start one.

He said that African Americans and Hispanics often earn less money than whites in comparable jobs. What's more, minority graduates disproportionately obtain more degrees in low-paying fields, such as education. As a result, income share agreements that place a premium on certain fields could put minority graduates at a disadvantage.

New Thinking Partner Conversation New Conversation
Paragraph 19 0
profile_photo
Dec 12
2020 Isabella DiNardo 2020 Isabella DiNardo (Dec 12 2019 9:58AM) : Minorities can be put at a disadvantage since ISA's place a premium on certain fields
New Thinking Partner Conversation New Conversation
Paragraph 19, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 19, Sentence 2 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 19, Sentence 3 0
No sentence-level conversations. Start one.

To level the playing field, Point Loma is offering the same terms to all students: 2 percent of their earnings for every $5,000 borrowed and six years to repay the money. Latter said the university identified about 20 seniors who had exhausted federal student aid options before completing their degrees, and offered them up to $10,000 to fill the financial gap.

New Thinking Partner Conversation New Conversation
Paragraph 20 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 20, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 20, Sentence 2 0
No sentence-level conversations. Start one.

"The terms on this are pretty good, certainly better than a private loan," he said. "We have a number of students who go into service-oriented jobs that don't always pay well, but we wanted to make sure they'd have the same opportunity as students in higher paying fields."

New Thinking Partner Conversation New Conversation
Paragraph 21 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 21, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 21, Sentence 2 0
No sentence-level conversations. Start one.

At Lackawanna, president Mark Volk views income shares as a way to build a self-sustaining form of financing for students with great potential, but modest means. The vast majority of the school's 1,600 students require loans and grants to cover the $15,000 tuition, he said.

New Thinking Partner Conversation New Conversation
Paragraph 22 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 22, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 22, Sentence 2 0
No sentence-level conversations. Start one.

Lackawanna, with a $5 million endowment, is not in a position to meet the full financial needs of its students, but the school wants to spare them the expense of having to take out private loans with accruing interest.

New Thinking Partner Conversation New Conversation
Paragraph 23 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 23, Sentence 1 0
No sentence-level conversations. Start one.

"We have a needy population, many are single parents or working adults returning back to school," Volk said. "Having this tool as another way to alleviate the burden of paying for college just makes sense."

New Thinking Partner Conversation New Conversation
Paragraph 24 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 24, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 24, Sentence 2 0
No sentence-level conversations. Start one.

Many Lackawanna students are pursuing degrees in health care and energy-related fields with starting salaries above $45,000 a year, so Volk said there is a reasonable assurance they can meet the demands of an income-share agreement. The school is still hashing out the terms for a spring debut, but is considering five- or 10-year repayments at less than 3 percent of a student's income.

New Thinking Partner Conversation New Conversation
Paragraph 25 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 25, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 25, Sentence 2 0
No sentence-level conversations. Start one.

While Thompson, the policy director at the Institute for College Access & Success, said having flexible terms is a good practice for income shares, the model is still not ideal for low-income students. Providing grants and scholarships based on financial need is the best way to help students complete their education, and colleges, she said, should use donations earmarked for financial aid to support more need-based grants or emergency scholarships, not to cultivate a debt product.

New Thinking Partner Conversation New Conversation
Paragraph 26 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 26, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 26, Sentence 2 0
No sentence-level conversations. Start one.

"A low-income student should not need to borrow more than the maximum federal loan amount to get a quality education," Thompson said. "They're already more likely to owe the most at graduation."

New Thinking Partner Conversation New Conversation
Paragraph 27 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 27, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 27, Sentence 2 0
No sentence-level conversations. Start one.

Kevin James, founder of the education nonprofit Better Future Forward, contends that disadvantaged students could benefit the most from income shares because the model lacks many of the risks of traditional loans.

New Thinking Partner Conversation New Conversation
Paragraph 28 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 28, Sentence 1 0
No sentence-level conversations. Start one.

"This is a population that needs new tools more than anybody because they don't have the social insurance that comes from being a part of a higher-income family," James said. "ISAs can be a transformative tool . . . if deployed correctly."

New Thinking Partner Conversation New Conversation
Paragraph 29 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 29, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 29, Sentence 2 0
No sentence-level conversations. Start one.

His organization teamed with the nonprofit College Possible to launch a pilot income share program serving 15 low-income college students in Minnesota during the summer. Students must maintain at least a 2.5 grade-point average in any major and be paired with a College Possible academic coach. They can select four-, eight- or 12-year repayment terms and are under no obligation to pay if they earn less than $20,000 a year.

New Thinking Partner Conversation New Conversation
Paragraph 30 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 30, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 30, Sentence 2 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 30, Sentence 3 0
No sentence-level conversations. Start one.

"We want to create broadly accessible funds that are tied to truly solid economic pathways, and those can be traditional college or workforce-oriented programs," James said. "There has been an evolution of the market, but having clear rules of the road will be important to make ISAs scalable and as cost effective as they can be."

New Thinking Partner Conversation New Conversation
Paragraph 31 0
No paragraph-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 31, Sentence 1 0
No sentence-level conversations. Start one.
New Thinking Partner Conversation New Conversation
Paragraph 31, Sentence 2 0
No sentence-level conversations. Start one.

DMU Timestamp: November 27, 2019 01:26

General Document Comments 0
New Thinking Partner Conversation Start a new Document-level conversation

Image
0 comments, 0 areas
add area
add comment
change display
Video
add comment

Quickstart: Commenting and Sharing

How to Comment
  • Click icons on the left to see existing comments.
  • Desktop/Laptop: double-click any text, highlight a section of an image, or add a comment while a video is playing to start a new conversation.
    Tablet/Phone: single click then click on the "Start One" link (look right or below).
  • Click "Reply" on a comment to join the conversation.
How to Share Documents
  1. "Upload" a new document.
  2. "Invite" others to it.

Logging in, please wait... Blue_on_grey_spinner