To date, about 60 U.S. colleges offer ISAs, estimates Tonio DeSorrento, CEO of Vemo Education, which designs and services such agreements for universities and vocational educational programs.

More common among private vocational programs, income-share agreements are increasingly offered by colleges and universities. Yet with little data on outcomes from ISAs and with labor markets upended by a pandemic, the exercise remains very much an experiment in higher education.

Still, DeSorrento estimates that over 1,000 ISAs have been awarded by colleges through Vemo, which is considered the largest ISA service provider for them.

The college with the biggest experiment in ISAs is Purdue University, which in 2016 became the first major public college to offer ISAs. To date, its program has disbursed $17.9 million across more than 1,600 contracts, and university officials are fundraising for Purdue’s third ISA fund. About 400 of its ISA contracts are in repayment status, meaning the students have graduated and landed a job earning above $20,000, which is the income threshold beyond which students must pay back.

Despite being one of the first programs to offer ISAs, Purdue officials are hesitant to tie them to graduation rates, which has generally improved over the years. “I don’t think we have enough data to make that connection with income-share agreements,” says Mary-Claire Cartwright, chief information office of the Purdue Research Foundation who manages the ISA program.

Other programs have been slower to attract students. Invest in U, launched by the University of Utah in January 2019, has awarded just 59 ISA contracts totalling $360,000, according to a university spokesperson. Three recipients have graduated and are making repayments.

Some programs are deliberately small. Colorado Mountain College, whose ISA fund is specifically offered to DACA students who aren’t eligible for federal aid, supports 20 students a year, according to its chief operating officer Matt Gianneschi. Since 2018 it has awarded ISAs to roughly 30 students, three of whom graduated this past June.

Do Students Share the Excitement Over ISAs?

Researchers say it is too early to draw conclusions about whether ISAs have delivered on their promise in higher education: offering an affordable financing alternative that aligns the interests of schools and students around making sure they graduate and get good jobs. But what colleges are learning is whether students understand ISAs and how they decide to take one on.

A study funded by the Lumina Foundation that is expected to be published next fall looks at how students are participating in ISA programs at the University of Utah, Colorado Mountain College and the San Diego Workforce Partnership, which provides job-training programs for adults.

So far, “initial ISA enrollment has been slower than expected” across the three programs, shares Terri Taylor, strategy director for innovation and discovery at Lumina Foundation. “In some ways that’s actually good, because I think what everyone is realizing is that although the general concept of an ISA might be somewhat easy, actually getting the terms right is pretty hard.”

And as it turns out, getting students to understand those terms, and how they differ from loans and other financing tools, is a common hurdle.

Read the full article about income-share agreements by Tony Wan at EdSurge.