Sunday, December 6, 2015

Investors buying shares in college students: wave of the future? Purdue University thinks so - Danielle Douglas-Gabriel, Washington Post

If college is an investment, students don’t have to be the only ones reaping the returns. Or for that matter, taking on the risks. In one novel alternative to private student loans, investors could front students the money to pay for college in exchange for a percentage of their future earnings. But what are the dangers to students who accept these so-called income-share agreements? Who would benefit the most? This week, Purdue University took a step toward answering some of those questions by partnering with Vemo Education, a Reston-based financial services firm, to explore the use of income-share agreements, or ISAs, to help students pay for college. Through its research foundation, the school plans to create ISA funds that its students can tap to pay for tuition, room and board. In return, students would pay a percentage of their earnings after graduation for a set number of years, replenishing the fund for future investments.

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