Lessons from a failed ISA

[jon-nyc]

Income Share Agreement, that is. An alternative way to finance college that is more like equity than debt. You get money for college and pay back based on your income over time.

I always figured they'd never overcome the adverse selection problem, but there are many other issues this guy reviews in the thread.

[Axtremus]

Good read. Thanks!

[Mik]

Lots of changes needed for this to scale. Legislators get more votes from forgiving student debt than fixing the ISA problems, so debt forgiveness will win over time. Legislatures will find a way to dole it out in dribs and drabs and so profit from it multiple times rather than in one fell swoop.

[Horace]

Presumably it's not politically viable to only lend money to students who plan on getting degrees that'll help them make money.

[jon-nyc]

The adverse selection problem is that people with higher earnings expectations prefer a debt system to an equity-like system.

[Horace]

The smart play is to participate in and vote for a political culture that will forgive all student debt and work towards erasing financial stratification of society altogether. Just a few more generations to go.