May 31, 2018
Purdue’s Back a Boiler to hold rates flat for second year
Income commitment rates for students in Purdue’s Back a Boiler income share agreement will remain at the 2016 level through the 2018-19 academic year.
WEST LAFAYETTE, Ind. — The income commitment rates for the Back a Boiler – ISA will remain at the 2016 level for Purdue University students enrolled in the Back a Boiler – ISA, an income-share agreement program that provides an alternative to Federal Parent PLUS and private student loans, Purdue Research Foundation officials announced Thursday (May 31).
Since launching the Back a Boiler program in the 2016-17 academic year, the fund has distributed $5.9 million through nearly 500 contracts and to students in more than 100 majors. The colleges with the highest number of enrollees include College of Engineering, Purdue Polytechnic Institute, College of Health and Human Sciences, College of Science, College of Liberal Arts, Krannert School of Management and College of Agriculture.
“Although the rates of Parent PLUS and conventional private loans went up again this year, Purdue Research Foundation is keeping the financial obligation for students in the Back a Boiler program to the same rates used to create the program in 2016,” said Mary-Claire Cartwright, Back a Boiler program manager. “It is important to note also that our graduating students are being offered good jobs with very competitive starting salaries and that helps keep the rates at a flat level even when other rates like Parent PLUS are going up.
The Back a Boiler program also has no interest rate, so undergraduate students in the program do not accrue interest debt while attending Purdue.
Earlier this year, Daniels announced that Purdue would freeze tuition for the 2018-19 academic year, making it the seventh straight year that tuition has not risen for Purdue students. Other initiatives in affordability and accessibility include a bachelor of arts degree in three years.
When launched, the Back a Boiler program used the Federal Parent PLUS interest loan amount of 6.3 percent in 2016 as guides to set the terms of a student’s financial obligation.
In May 2018, the Federal Family Education Loan Program and the Direct Loan Program set the Parent PLUS interest loan amount at 7.6 percent for the 2018-19 academic year, up from 7.0 percent for the 2017-18 academic year. Over the past 10 years, the Parent PLUS interest rates have ranged from 6.3 percent to 8.5 percent. Private student loans have varied from 9 to 11 percent over the same time period.
“Should a Purdue student need financial assistance, it is important for Purdue to provide its students with alternatives to pay for school so they and their parents can determine the way that best suits their needs,” Cartwright said.
At the time Back a Boiler launched, Purdue University was the first major research university in the U.S. to offer an income share agreement as an alternative to Federal Plus and private student loans. Back a Boiler is not recommended as an alternative for government-subsidized student loans.
The program offers students and their families an alternative financing option in which a student receives education funding in exchange for an agreed-upon percentage of post-graduation income over a set number of years. The Back a Boiler - ISA contract payback period is about 10 years.
To view previous news articles about Back a Boiler visit:
- What Universities Need: More Skin In The Game (Forbes, April 30, 2018)
- How Yale’s ‘Failed’ Income Share Agreement Worked For Me (RealClear Education, May 15, 2018)
- Purdue invests in students’ futures with new model of financing (PBS NewsHour, August, 22, 2017)
Media contact: Cynthia Sequin, Purdue Research Park, 765-588-3340, email@example.com
Source: Mary-Claire Cartwright, 764-588-1051, firstname.lastname@example.org