The Student Loan Alternative

How do income-based repayment plans differ from traditional privatized student loans and why should students seriously consider the alternative?

Unlike student debt, it shifts the burden — or the risk, I should say — entirely from the student to the investor.

— Hari Sreenivasan, NPR

An ISA is an alternate method of acquiring funding to attend college. Rather than putting on thousands of dollars of loans over the span of their education, students can use investor funds to pay their education. In exchange, a percentage of annual income is paid back to the investors for a fixed period of time after graduation.

Recipients’ payments under an ISA adjust with their income, effectively providing insurance against the downside risk of being unable to make payments on a loan due to unemployment, underemployment, or other financial hardship.

This system allows for students of all backgrounds, including those pursing both high and low yield majors, to successfully obtain an education with constant fear that their employment would be unable to compensate for their college tuition.

We at EduSeed took the concept of an ISA and explored it, rationalizing on how the process could be more beneficial for both students and investors. Our result is a solution that we believe will disrupt both traditional private student loan financing, and first-job recruiting.

EduSeed takes advantage of this new model as a vehicle to match students to investors. By taking into account factors such as a student’s potential income, academic success, and desired career path, EduSeed creates ISA packages that link students to investors from their respective schools in industries they desire who can act as mentors and their source of funding.

Read more about our upcoming ISA programs at EduSeed.co

Written By: Anuj Vasil, Co-Founder