April 15, 2020
When it comes to higher education, most people share two opinions: It’s important for long-term life outcomes, and college is getting way too expensive.
The good news is, Salt Lake Community College, Utah Valley University and the University of Utah are delaying tuition hikes in an effort to keep education affordable during the coronavirus outbreak.
Until this week, all Utah institutions of higher education had made the decision to raise tuition during the COVID-19 pandemic (except for Southern Utah University).
We all know that outrageous college costs turn into crushing student loan debt for individuals and negative trends for the national economy. Especially with the pandemic and its potential impacts on the economy, these impacts loom even larger.
Familiar proposals to address college costs include highly subsidized tuition, free college, phasing out loan forgiveness (a backdoor “free college” policy), or even questioning the role of federal funds in inflating college costs.
But one Utah institution also offers an innovative program to ease college costs – the University of Utah – with an income share agreement.
Income share agreements are basically a contract between the university and the student, where the terms are thus: the school agrees to foot the bill of college costs up front and the student agrees to pay a share of their income for a time after graduating and finding gainful employment.
While the University of Utah’s “Invest in U” income share agreement (ISA) was initially limited to juniors and seniors in only certain majors, the school has made this program available to juniors and seniors in all majors in response to the widespread economic difficulties being felt from the coronavirus pandemic.
Those who qualify are allowed to borrow up to $10,000 in ISA funding. Students then pay a percentage of their monthly income for a certain amount of years, depending on the terms of the individual income share agreement. Students payments go into a pool, basically, and are used to fund income share agreements in the future.
Time will give us a better sense of how students and universities respond to these options. It can hopefully spark funding ideas for other universities across the state and country.
In the meantime, students who are taking advantage of the income share agreement have a unique opportunity to finish their higher education and stay away from additional student loan debt during a tricky economic time. And it’s possible that if these agreements are expanded or spread throughout the state, they might have the effect of preventing future tuition hikes.
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