Warning that student loan debt could be the next national economy bubble to burst, Congressman Todd Young (R-IN) introduced the Student Access Act legislation.
The bill would offer college students access to Income Share Agreements (ISAs) to help fund their college education.
“Not enough is begin done to address the affordability problem,” said Young. “That’s why I crafted this ISA bill—because we’re in dire need of a real market-driven solution that’s not only good for students, but good for American taxpayers whose tax dollars aren’t involved and at risk.”
Providing legal certainty to give investors the confidence to support it, the bill clarifies the tax treatment for both the student at the front and back end of the agreement. It also puts in place robust consumer protections for students throughout the process.
Since the introduction of Young’s ISA Act of 2015, the concept of ISAs has been well discussed and debated in many financial publications.
Additionally, a pilot ISA program is underway in the state of Indiana. The program, dubbed “The Indiana Experiment,” was formally known as the “Bet On A Boiler” program at Purdue University in West Lafayette, Indiana.
As part of the program, the university has partnered with private firms that manage income share portfolios in order to provide students the choice to cover all or a portion of their tuition through an ISA.
At a recent hearing, Purdue University President Mitch Daniels was highly supportive of the innovative ISA idea.
“You want debt-free education?” he said. “Here it is. I’m very encouraged to hear that is has some prospects.”