Income share agreements – what university general counsel ought to know

Amid widespread concern about student debt and calls for higher education institutions to put more "skin in the game," some have looked to income share agreements (ISAs) as part of the solution.

In general, under an ISA, a school or investor provides a student funds for education today in exchange for a percentage of the student's income tomorrow. Incentives are theoretically aligned: the better job a student gets, the more money an institution earns. Like other innovations, however, ISAs largely exist in the interstices of existing legal frameworks and therefore can present challenges.

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