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Danielle Douglas-Gabriel writes in the Washington Post that Purdue University is partnering with Vemo Education, a Reston-based financial services firm, to create income-share agreements, or ISAs, that its students can tap to pay for tuition, room and board. In return, students would pay a percentage of their earnings after graduation for a set number of years, replenishing the fund for future investments.
Purdue president Mitch Daniels calls the contracts a constructive addition to today’s government loan programs and perhaps the only option for students and families who have low credit ratings and extra financial need. "From the student’s standpoint, ISAs assure a manageable payback amount, never more than the agreed portion of their incomes. Best of all, they shift the risk of career shortcomings from student to investor: If the graduate earns less than expected, it is the investors who are disappointed; if the student decides to go off to find himself in Nepal instead of working, the loss is entirely on the funding providers, who will presumably price that risk accordingly when offering their terms. This is true “debt-free” college."
However some observers worry that students pursuing profitable degrees in engineering or business would get better repayment terms than those studying to become nurses or teachers. "Income share agreements have the potential to create another option for students looking to pay for college while seeking assurances they will not be overwhelmed by future payments," says Robert Kelchen. "However, given the current generosity of federal income-based repayment programs and the likely hesitation of those who expect six-figure salaries to sign away a percentage of their income for years to come, the market for these programs may be somewhat limited."
(Score: 2) by NotSanguine on Wednesday December 02 2015, @06:28AM
3. If they can make people sign binding agreements to turn over a portion of income, what other conditions could they attach to improve their odds of a profit. The mind boggles. Are all the civil libertarians reaching for smelling salts yet? What is they start requiring they can pretty much direct your life for a few years after graduation, instead of having a few job offerings in mind which the grad can pick or not, what if it more like a military enlistment where you go where they send you. What happens when somebody notices the similarities to indentured servitude? But both lender and student will both be driven to these measures as students want the best deal and the lender wants the highest chance of profit. [emphasis added]
I have an idea about that. For a variety of reasons, I need to sign a user agreement with a service provider, which seems to be designed to maximize their rights and my responsibilities and minimize my rights and their responsibilities.
I'm considering modifying some of the 4pt font text in the PDF they sent me, to "require officers of the corporation to submit to pubic hair removal by my hand, at my discretion and in a manner of my choosing."
I suspect that no one will even notice until I show up at the company HQ with my tweezers and straight-razor.
Then again, perhaps that clause is in the 50 or 60 pages of T&Cs that were included by reference in the "agreement."
Is that the sort of thing that you worry about?
No, no, you're not thinking; you're just being logical. --Niels Bohr