Income-Share Agreements Burden Students with Unfair Terms and Unforeseen Costs
“Income-share agreements,” or ISAs, fund a portion of educational costs in exchange for a percentage of a student’s earnings over time. Many ISA providers continue to argue that their products are not loans even though they lend money and subsequently require repayment, employing an old and predatory tactic that loan providers use to evade consumer protection guardrails. In fact, ISAs are simply high-cost loans that currently lack even the protections afforded to private student loans, which themselves are a worse option than federal student loans for most borrowers. The high cost of ISAs...