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Sell Your Future Income to Pay for College?

Roger_DooleyRoger_Dooley 6084 replies100309 postsFounder Senior Member
Don't like the idea of big student loans, but still need money for college? Here's a novel idea: sell shares in yourself. Or, actually, your future income:

"The Purdue Research Foundation’s new “Back a Boiler” program would fund upperclassmen who were willing to repay the foundation a percentage of their post-graduation salaries for no more than 10 years."

http://time.com/money/4568213/income-share-agreements-college/

The Time article states that Purdue and five other schools are trying this. What do you think? Better or worse than a fixed-amount loan?
33 replies
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Replies to: Sell Your Future Income to Pay for College?

  • roethlisburgerroethlisburger 2735 replies150 postsRegistered User Senior Member
    Are there any other colleges doing this or just Purdue?
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  • CourtneyThurstonCourtneyThurston 1369 replies14 postsRegistered User Senior Member
    There are SO many forms of this in scholarships, except rearranged in the form of "We'll give you money now, but you'll work for us after graduation for double the length of your undergrad"

    I think they're horrible deals (at least in my field, where getting employed is not a problem), yet many students take scholarships like these.
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  • allyphoeallyphoe 2357 replies57 postsRegistered User Senior Member
    Depends on how much money you get now, and how much of your income you'd pay back later. Also how the ten-year clock starts and stops.
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  • KimXClarkKimXClark 18 replies7 postsRegistered User New Member
    There are several "coding bootcamps" that offer ISAs. But they aren't traditional, accredited universities. The only opportunities for traditional undergraduates that I know about are: Purdue, Clarkson University, which has a scholarship for a couple of "young entrepreneurs" and a company called "Education Equity" will fund some students in Illinois teacher training programs.
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  • KimXClarkKimXClark 18 replies7 postsRegistered User New Member
    Also, I'm not aware of the kinds of scholarships mentioned above. If you could provide any links or information about them, I would be glad to check them out.
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  • CenterCenter 2204 replies66 postsRegistered User Senior Member
    Isn't this indentured servitude?
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  • insanedreamerinsanedreamer 1533 replies3 postsRegistered User Senior Member
    edited November 2016
    Why not?

    Companies commonly do something similar (pay for your education, typically a masters, in exchange for working for them for X time.) So does the military.

    I think it's a good option for those who want it.

    It's not indentured servitude - that would be working without remuneration. This is more like a loan, except that it's tied to a percentage of your income.
    edited November 2016
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  • lookingforwardlookingforward 33100 replies358 postsRegistered User Senior Member
    edited November 2016
    I highly doubt this is a pot of gold available to just any good student. In the further info, I don't see what the real full qualifications are, just how promising one needs to be. Nor what the real loan caps are.

    Asking someone to work for you in return still presumes a competitive salary. Offering loan reduction for x years in some form of public service is an attempt to underwrite some public good.

    In the case of the Clarkson student, he paid 12k one year (and we don't know what % that is.) But at that rate, for ten years, the foundation won't recoup. They're taking a chance and can't just do that for everyone with an idea.

    edited November 2016
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  • KimXClarkKimXClark 18 replies7 postsRegistered User New Member
    To be clear: Many of the ISAs I wrote about don't require you to work for any particular employer, but rather require you just to pay a percentage of whatever salary you earn to the funder. One exception is the Clarkson program, in which the school takes a 10% equity stake in the student's company. So, presumably, the graduate would have to keep working for and building his or her business after leaving school. The Education Equity ISAs are for teacher training, but as long as you make your payments, they probably don't care what job you end up taking. The Purdue ISAs apply to any employer.
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  • CourtneyThurstonCourtneyThurston 1369 replies14 postsRegistered User Senior Member
    "Asking someone to work for you in return still presumes a competitive salary."

    Disagree. You give up all leverage over considering better offers, negotiating benefits, negotiating pay, raises, etc. You have no leverage over your own career when you accept this kind of scholarship. I've seen plenty of kids miss out on highly competitive opportunities because they were tied to, say, the NSA's 8-year-long "work for us" agreement that comes with the Stokes Scholarship (let me tell you, government pay in cs <<<<<< pay in industry).

    It's a terrible deal all the way around. I only ever recommend these kinds of scholarships to kids who would absolutely be unable to afford any kind of decent college otherwise.
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  • KimXClarkKimXClark 18 replies7 postsRegistered User New Member
    Again, the ISAs I wrote about don't require you to work for any particular employer. And I am not aware of any ISAs that do that. Courtney may be referring to some corporate tuition plans, which are a different way to fund college.
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  • lookingforwardlookingforward 33100 replies358 postsRegistered User Senior Member
    edited November 2016
    Right. Courtney is responding to my comment about competitive wages. I see her point. Though it is not always dire.

    My curiosity is just what qualifies for the Purdue opportunity. Unless this is pure generosity (as with some large scholarship programs,) do they not expect some reasonable payback potential? (Yes, separate from what Clarkson offers.) And, what sort of %? Do kids realize the potential impact?
    edited November 2016
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  • MassDaD68MassDaD68 1524 replies24 postsRegistered User Senior Member
    @CourtneyThurston I think the NSA scholarship is a great program much like ROTC is. But it is geared to those people that have a desire to help their country. You sacrifice wages for your country. A small price to pay for those willing to help their country but for whatever reason do not wish to take up arms and deploy to a foreign land.

    It is interesting to note that the NSA program must be incredibly hard to get. You need a perfect SAT score. Not many kids have a perfect score AND wish to study what the NSA requires. A very small club indeed.

    https://bigfuture.collegeboard.org/scholarships/national-security-agency-stokes-educational-scholarship-program#

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  • MassDaD68MassDaD68 1524 replies24 postsRegistered User Senior Member
    As to the OP. I think it raises some interesting questions. I wonder if they offer it for entrepreneurial studies at a business school. Must be hard to collect from the cash only business owner that graduated on your dime. :)

    On a more serious note. I think it could be a wonderful program for those that wish to pursue occupations that they know will not pay that much but still want to attend a very expensive private school. It would enable those individuals a much better way to finance an expensive education with little risk. This could be a huge boom for the many LAC that offer studies which do not produce large starting salaries. It could really turn out to be a wonderful thing for society. God bless those companies for willing to finance such noble causes.
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  • halcyonheatherhalcyonheather 8775 replies212 postsRegistered User Senior Member
    You need a perfect SAT score. Not many kids have a perfect score AND wish to study what the NSA requires.
    It says "1600 SAT score (reading and math) and/or 25 ACT score," so I assume they mean 1600/2400 despite the "reading and math" thing.
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  • KimXClarkKimXClark 18 replies7 postsRegistered User New Member
    edited November 2016
    In reply to MassDa68 - yes, if you read the article, you'll see that there is one program specifically for young entrepreneurs. Clarkson University has a program in which it offers free tuition in return for 10% of the student's business.
    edited November 2016
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  • roethlisburgerroethlisburger 2735 replies150 postsRegistered User Senior Member
    edited November 2016
    I've seen plenty of kids miss out on highly competitive opportunities because they were tied to, say, the NSA's 8-year-long "work for us" agreement that comes with the Stokes Scholarship (let me tell you, government pay in cs <<<<<< pay in industry).

    This a 1 sided picture of the program. While government pay is typically less, work-life balance is usually better than many, but not all private sector companies. The program commitment is 1 and a half times the length of study, so 6 years instead of 8 after graduation. If your goal is to work in cyber security, experience at NSA can open doors that might otherwise be closed.
    edited November 2016
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  • KimXClarkKimXClark 18 replies7 postsRegistered User New Member
    And in response to LookingForward, if you read the story, you'll see that I link to Purdue's pricing tool that shows the different % charged different majors. You can find the pricing tool here: http://purdue.edu/backaboiler/
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  • patsmompatsmom 4174 replies504 postsRegistered User Senior Member
    edited November 2016
    It is interesting to note that the NSA program must be incredibly hard to get. You need a perfect SAT score. Not many kids have a perfect score AND wish to study what the NSA requires. A very small club indeed.

    That intrigued me so I followed the link to see what else it said.
    Preference given to those with minimum 3.0 GPA, 1600 SAT score (reading and math) and/or 25 ACT score.
    Huh? Are they equating a 1600 SAT with a 25 ACT? And how likely is it that a kid with a 1600 would have a 3.0? I think that's got to be a mistake.
    edited November 2016
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