Young sponsors bipartisan ISA Student Protection Act

U.S. Sen. Todd Young (R-IN) this week introduced a bipartisan bill that aims to protect postsecondary students by bolstering consumer protections to Income Share Agreements (ISAs), which allow them to design financial aid best suited to their needs based on future income and job success.

“Our bipartisan bill works to 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,” Sen. Young said.

The ISA Student Protection Act of 2022, S. 4551, which Sen. Young sponsored on July 19 with lead original cosponsor U.S. Sen. Mark Warner (D-VA), would provide a consumer protection framework necessary to support the growth of accessible, affordable and accountable financing options for postsecondary education, according to the text of the bill.

Under ISAs, students agree to pay a percentage of their income over a given time period in exchange for tuition payments from non-governmental sources, a bill summary provided by Sen. Young’s staff says, and 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. As we face record-high inflation, many students and their families continue to face financial hardship and rising student loan debt,” said Sen. Young. “With the appropriate safeguards, ISAs can be an innovative, debt-free financing option for students of all backgrounds.” 

If enacted, the bill would prohibit ISA providers from entering into agreements with students that require payments higher than 20 percent of income; exempt individuals from making payments towards their ISA when their income falls below an affordability threshold; set a maximum number of payments and limits payment obligation to the end of a fixed window; and establish a minimum number of voluntary payment relief pauses, during which payment obligations may be suspended, among other provisions.

S. 4551 has garnered support from numerous groups, including Jobs for the Future, the Invest in Student Advancement Alliance, the Student Freedom Initiative, the San Diego Workforce Partnership, and Purdue University, among others.