Skip to main content
Add as a preferred source on Google


California Considers Piloting Income Share Agreements

  • By Dian Schaffhauser
  • 08/10/18
graduation cap sitting on stacks of coins

The California legislature has mere days to wade through literally hundreds of bills that lawmakers are trying to push through. Both the Senate and Assembly have until Aug. 31, 2018 to pass their bills. One of the bills awaiting further action is A.B. 2479, which would require the state's two university systems to pilot an income share agreement. According to the bill, California State University and the University of California would each have to choose a single campus to try out the pilot, which would begin in time for the 2020-2021 academic year.

In the experiment, students would be allowed to commit to paying a specified portion of their future income to the participating campus in place of paying tuition when they enroll. They'd have up to 10 years to do repayment based on a percentage of income, and monthly payments would commence six months after graduation. If the annual income were below $20,000, no payments would be required; however, the sharing agreement would be extended for that same number of months. The program would only be open to students in their sophomore, junior or senior years. Other eligibility requirements would be up to each university system, including a repayment cap and the ability to "extinguish" the repayment obligation before 10 years was up. After the experiment was done, the campuses would need to submit reports to share their findings.

Income share agreements aren't new. In the 1970s, Yale University dabbled with the idea, but it was at the cohort level. An entire cohort would agree to pay back a portion of its earnings until the balance was met. However, the experiment faltered when some graduates refused to or couldn't pay back their shares and others complained about footing more of the bill. Fast-forward to 2013, when Oregon approved an income share experiment, which it called "Pay It Forward, Pay It Back": Backed by the government, the experiment withered when students ended up earning less than the assumptions expected. Vemo Education was founded in 2015 to work with colleges and universities in setting up similar programs; according to coverage by the Chicago Tribune, the company now counts 30 public institutions among its client base, the most recent being Norwich University in Vermont. Since then, numerous studies, including from the American Institutes for Research, New America and the Aspen Institute, have come out debating the merits and obstacles of the approach.

Right now, the California bill has passed both the Assembly, where it was introduced, and the Senate. Now it's awaiting input on funding.

About the Author

Dian Schaffhauser is a former senior contributing editor for 1105 Media's education publications THE Journal, Campus Technology and Spaces4Learning.

Featured

  • Abstract polygonal hacker with laptop on technology dark background

    Cybersecurity Researchers Identify First Fully Autonomous AI-Driven Ransomware Attack

    Threat researchers at cloud security firm Sysdig have disclosed what they describe as the first documented ransomware operation carried out end-to-end by an autonomous AI agent, with no human typing commands or directing individual steps once the attack was underway.

  • CIS Sandbox Tutor Eli Blouin at Bentley University imagines a future technology learning partner that supports curiosity, critical thinking, feedback, and personalized learning.

    Student Voices: Technology as a Future Learning Partner

    A data analytics and marketing major at Bentley University and a distinguished lecturer at the university explore the future of "technology learning partners" — technologies that participate in the learning process by asking questions and giving feedback, not just information search results.

  • Silhouettes of business professionals stand against a blurred futuristic city skyline at night, with a glowing digital network data connection

    It's Time for Higher Ed to Get Serious About AI Strategy

    Without a coordinated strategy that involves multiple academic and administrative units across the entire campus, colleges risk wasting resources, duplicating efforts, and ultimately failing to deliver on the promise of deploying technology to improve learning and operations.

  • Hootsuite

    Beyond the Feed: How Higher Ed Turns Social Media Into a Measurable Enrollment Engine

    More than half of prospective students research programs on social media before visiting a university website, and nearly half will skip applying to a school that looks inactive online. Hootsuite, the all-in-one social OS platform trusted by more than 2,000 higher education institutions, helps campus teams turn everyday posts into measurable outcomes, from applications to alumni giving.