Purdue launches search for ISA partner
August 6, 2015
WEST LAFAYETTE, Ind. - Purdue Research Foundation announced Wednesday (Aug. 5) that it will begin a formal solicitation process to find a partner firm to establish and manage income share agreement (ISA) funds, a proposed new way to help Purdue students pay for higher education.
“This no-debt, low-risk option is another way we can help keep our land-grant school within financial reach of all qualified students,” Purdue University President Mitch Daniels said. “And I’m convinced that those who support the education of a student at Purdue are making a very sound investment.”
Income share agreements were touted by Daniels in March during testimony before a congressional panel about the Higher Education Act. Last week, bipartisan legislation was introduced in the U.S. House of Representatives to help clarify the law and to ensure consumer protection for students.
The program is a new type of market that gives students another choice in funding their education. The agreements would give students the option of drawing funds from an investment pool to cover their education costs, in exchange for agreeing to pay an affordable percentage of their post-graduation income for a set period of time. An ISA has no explicit principal balance or interest, so its payments adjust with the student’s income over the life of the contract; if a student makes less than expected, he or she is not beholden to the investors for any more than the agreed-upon percentage.
When the solicitation process begins to find a partner for the ISA program, firms will be sought that have business acumen, administrative capabilities to run the program efficiently and transparently, and the ability to advise on critical program requirements, such as strong consumer protections for interested students.
“We know there are companies that already are organizing to serve this new market,” Daniels said. “Those firms are waiting for college partners who want to add the ISA as an option for students.”
Once a firm is chosen, the Foundation expects to develop the program offering the ISA option to students beginning in the spring semester of 2016.
Media contact: Cynthia Sequin, Purdue Research Foundation director of marketing and communications, 765-588-3340, firstname.lastname@example.org
Note to Journalists: Additional resources and previous news coverage relating to income share agreements is available at http://www.purdue.edu/newsroom/releases/2015/Q3/resources-and-news-coverage-about-income-share-agreements.html.