The Income Share Agreement Landscape: 2017 and Beyond

Audrey Peek
Nicole Guarino
Matthew Soldner

Despite many uncertainties facing the nation regarding education policy, one issue seems likely to move forward in the coming years: increasing access to income share agreements (ISAs).

An ISA is a new form of private financial aid that offers students money upfront to pay for college in return for a percentage of students’ future earnings. Currently, just one traditional postsecondary institution, Purdue University, offers an ISA through its Back a Boilermaker program. At a handful of coding boot camps and specialized institutions, all students use ISAs to cover their tuition and fees. Despite this small market, buzz about ISAs is growing on Capitol Hill and in state legislatures. Substantial shifts in the ISA landscape may be on the horizon.

AIR released several studies on the potential for ISAs to help low-income students pay for college. The purpose of this fifth and final brief in a series about ISAs is to explore the current state of the ISA market and highlight opportunities and threats to its expansion.

Key Findings

  • Today’s ISA market offers two products: ISAs intended to be students’ primary source of financial aid, and ISAs intended to fill in the gaps after federal aid.
  • The ISA market has used several strategies for expansion: building legitimacy through partnerships with institutions, emphasizing how ISAs protect against a risky labor market, and promising that ISAs will improve the relationship between price and outcomes in higher education.
  • The ISA market faces several barriers to expansion: the complexity of its products, public mistrust, and unresolved legal questions.
  • Changes to the Graduate PLUS loan program may open the door to further ISA expansion.