Once a hot topic in higher education, income-share agreements have faced increasing scrutiny in recent years. Now, even as some colleges wind their ISA programs down, Stanford Law School is going a different route and launching a new pilot program for income-share agreements.
The ISA program will provide up to $170,000 up front to first- and second-year law students who participate, with the expectation that they pay 10 percent of their future earnings for a period of 12 years to the nonprofit Flywheel Fund for Career Choice, which is providing the money to students, according to a Reuters report. Annual tuition at Stanford Law is roughly $67,000.
Stanford officials said the program was designed to make sure that participating students do not pay more in the ISA program than they would if they had taken out federal loans for law school.
ISA programs have been a source of tension in higher ed due to their unclear rules. While providers maintain that ISAs offer a necessary alternative to traditional loans in a flawed financial aid system, consumer advocates have long argued that such programs are predatory, and the Department of Education has declared that the agreements are, in fact, student loans.