Income Share Alternatives To Student Loans Could Reduce Graduate Debt

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HUNTSVILLE, Ala. (WHNT) - If you are out of college and still paying off student loans, you're not alone. Student loan debt in America has ballooned to more than a trillion dollars.

But what if you could avoid the debt and find someone to literally invest in your academic success?

Senators Marco Rubio and Tom Petri have introduced a bill called the Investing in Student Success Act. The bill would strengthen income-sharing laws, meaning investors can lend students a lump some of money to pay for their education, in exchange for a percentage of that person's future income, paid back over a fixed period of time.

Since the payments are based on a fixed percentage of the graduate's income, the agreement takes pressure of college graduates who face an extended job search or end up making less in their first job than anticipated.

A handful of new businesses are already doing this. Lumni offers to finance education based on a person's potential. Upstart lets students pitch themselves to a marketplace of backers in hopes of retiring their student debt.

It is a fairly new idea, but if met with enthusiasm, supporters believe it could help drastically cut the nations' growing student loan debt.




  • Tina Fernandez

    This is good for the younger generation, but what about those, like me, who have had to “retrain” due to a lagging job market? I just graduated from Wallace State with an Associate’s of Science in Web Technology this past December. My student loan payments start in June. I have found that with an Associate’s Degree, even with over 20-years of graphic design experience, it is hard to find a job in Web Tech. Colleges just are not teaching what employers are looking for, and most employers want more experience, even for entry level. It is very frustrating, especially when one had hopes of a friendlier job market upon graduation. No, you are not guaranteed a job upon graduation. I just feel that the older college students should also be able to take advantage of such programs. It is hard having student loans to pay off at age 22, but what about at age 46?

    • Daniela Perallon

      It is my understanding that these opportunities would be open to anyone seeking higher education, regardless of age, and ESPECIALLY for people seeking Masters degrees.

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