U.S. Sens. Todd Young (R-IN), Mark Warner (D-VA), Marco Rubio (R-FL), and Chris Coons (D-DE) have reintroduced the ISA Student Protection Act, which supports a financing tool for students pursuing postsecondary education.
Specifically, the legislation would protect students by applying strong consumer protections to Income Share Agreements (ISAs), which provide opportunities for students to design financial aid tailored to their needs based on future income and job success.
Under an ISA, a student agrees to pay a percentage of their income over a given time period in exchange for tuition payments from nongovernmental sources, per authorities, adding when the agreed timeframe ends, the student stops payments – regardless of whether the initial amount was paid back to the ISA funder.
“One thing we can all agree on is the importance of a quality and affordable education,” Young said. “As we face record-high inflation, many students and their families continue to face financial hardship and rising student loan debt. With the appropriate safeguards, ISAs can be an innovative, debt-free financing option for students of all backgrounds.”
Young said the legislation would strengthen the framework for ISAs to help colleges and career and technical schools prepare students for success in the workforce at no cost to the taxpayer.
“Income-Share Agreements are a promising way to finance postsecondary education and an attractive alternative to private student loans and PLUS loans. ISAs are also proving to be uniquely responsive to the needs of students who are ineligible for existing federal student aid programs,” Warner said. “There are students across the country who are already benefiting from ISAs and deserve the safeguards and certainty the ISA Student Protection Act of 2022 would provide.”