Rubio’s College-Cost Plan Deserves a Chance
- December 2, 2015
- Posted by: Kerry Schneider
- Category: Income Share Agreements (ISAs)
From: Bloomberg View
By: Paula Dwyer
Marco Rubio has taken a lot of heat for endorsing what some have derided as indentured servitude for college students.
Intriguingly, the plan the Republican presidential candidate is backing is indentured servitude, though strictly voluntary, as he keeps pointing out. It’s also one of the more promising solutions to the U.S. student-debt predicament.
The new method, called income sharing, typically involves a “loan” (I’ll explain the quotation marks later) from investors to students. Instead of paying the money back with interest, students contract to pay their investors a set percentage of income for a fixed number of years after graduation.