To make higher education more affordable and accessible, Purdue University has taken such steps as to freeze tuition, offer liberal arts degrees in three years instead of four, reduce dorm costs and create a unique partnership with Amazon to reduce textbook fees. But the university also pioneered a fresh financing concept: an income share agreement program, dubbed Back a Boiler, that provides an alternative to traditional student debt.
Instead of taking out a private or parent-co-signed loan, students who opt for ISAs receive education funding from their school in exchange for an agreed-upon percentage of postgraduation income over a defined number of years. Purdue’s program is in its fifth year and currently includes 1,668 contracts worth $18.1 million to its students and graduates.
“This is for students who exhausted grants, scholarships, federal loans and might otherwise be going to private loans,” says Mary-Claire Cartwright, vice president at the Purdue Research Foundation and manager of the Back a Boiler program. “There are groups of people who like to bootstrap their own education or are averse to traditional debt. There can be a lot of really unique reasons students will choose an income share agreement, and it is amazing how many different stories people have.”
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