Giving Compass Take:

· Preston Cooper at AEI discusses a new financing option known as income-share agreements and the misconceptions about what income-share agreements are and how they can benefit the student.

· Are income-share agreements a solution to the student debt crisis? Who benefits from the income-share agreements? Are income-share agreements a good option for those who don't qualify for federal student aid?

· Read more about income-share agreements. 

Earlier this week, New York Times columnist Andrew Ross Sorkin published a profile of Lambda School, an online academy that provides students with short-term training in subjects such as software engineering and data science. Colloquially known as “coding bootcamps,” schools like Lambda have rapidly expanded in recent years as faster and more inexpensive alternatives to traditional higher education, particularly at the graduate level. While master’s degrees in computer science can drag on for years, students graduate from Lambda School’s programs after just 30 weeks.

One of the most innovative aspects of many coding bootcamps, including Lambda, is the way students pay for their education. Students have the option to use an “income-share agreement” (ISA), wherein they pay nothing to their school upfront, but agree to pay a certain share of their income for a specified period of time after they graduate. If a student doesn’t find a well-paying job after graduation, she does not have to pay anything until she does.

Read the full article about higher education and income-share agreements by Preston Cooper at AEI.