1. Examining the Impact of Income Share Agreements
June 4, 2019

2. Today Show Video
loan-debts-off-graduates

3. Legal agreements to “share” or remit a fixed percentage of future income in return for current funding
ISAs are not loans
Defined terms include income share %, term of agreement, minimum income threshold, and payment cap
Generally

4. ISAs versus Loans Student is not a borrower
ISA amount may never be repaid
Not subject to loan-related obligations
Flexible repayment
Social responsibility component

5. Deriving the Terms
How do you come up with the various types of terms in ISAs?
What factors are considered?
Do the terms of an ISA differ by institution, program, student?
Do you use an algorithm?

6. Servicing Who services ISAs? How do you service ISAs?
How is it similar to and different from loan servicing?
Servicing

7. Institutional versus Independent Funding
What is the difference between ISAs funded by an institution of higher education and ISAs funded by an independent funding source?
Is there a hybrid model?

8. Criticism Indentured servitude Students could end up paying too much
Places too much pressure on students
Certain programs become less attractive
Harmful impact on federal loan program

9. Legislation and Regulation
Are there any federal or state consumer protection laws or regulations governing ISAs?
Not yet
Are there any federal or state laws or regulations governing tax treatment of ISAs?
Any legislation pending in the Congress or the states?
Yes

10. Education Department
What do we know about ED’s use of the Experimental Sites Initiative (ESI) to encourage ISAs?
New source of funds?
Waiving applicability of statutes and regulations?

11. Student Satisfaction Appreciate the clarity of the transaction
Appreciate the transfer of risk
Appreciate the manageable payments

12. Securitization Can ISAs be securitized? How does that work?
What are the risks and benefits?

13. Moderator Jonathan Vogel Vogel Law Firm PLLC jonathan. vogel@vogelpllc
Moderator Jonathan Vogel Vogel Law Firm PLLC Panelists Andrew Davis Education Equity, Inc. Will Shaffner Missouri Higher Education Loan Authority
Questions?