Money Crashers: Income Sharing Agreements (ISA): A New Way to Pay for College

My latest article on Money Crashers is part of what you might call my Making College Cheaper series. I've done pieces on tuition-free colleges, the pros and cons of paying for your kids' college education, and free or cheap college classes for senior citizens. And in this piece, I'm tackling a relatively new way to pay for college: income sharing agreements (ISAs).

First pioneered in the U.S. via Purdue's "Back a Boiler" program, ISAs are now available at nine U.S. colleges and universities, as well as some non-degree-granting programs. These schools, in essence, offer to cover your tuition costs for you in exchange for a cut of your earnings after you graduate. But is this really a good deal for students? To be specific, is it a better deal than a traditional student loan?

The answer to this question, it turns out, depends on several factors, such as your college, your major, your chosen career, how much you need to borrow, and what your other options are. This article explores those points, along with the history of ISAs, how they work, and where they're available. It should tell you what you need to know to decide whether you, or the future college student in your life, should consider this financing option.

Income Sharing Agreements (ISA): A New Way to Pay for College