Trade Future Income for Free College.
If someone offered you $50,000 in exchange for 15% of each paycheck for the next 8 years — would you take it?
It’s an interesting question. Money up front now, when you need it, in exchange for repayment later when you have it. It’s like a loan, without the interest- which is great. It sounds like a win-win... so what’s the catch?
This is the challenging question students are now facing at some colleges with what are being called “income-share agreements”.
An income share agreement within the context of higher education is where a college pays the tuition bill for a student and in exchange, the student agrees to give a portion of their future income back to the college.
Essentially, students are selling future stock in themselves.
The Upside to Income Share Agreements
The upside of the income share agreement is that there is no interest on the loaned money and if you don’t get a job right out of school you don’t have to pay anything. The percentage you pay is based on the amount you’re making.
