Would You Sell Yourself As A Stock To Have College Tuition Paid For? You Can Starting Next Month

by 4 years ago

We are in an era of an overabundance of crowdfunding where so much money is pledged to senseless and bizarre projects. Such as the cell phone case that is also an e-cigarette vaporizer or Fish on Wheels, an aquarium on wheels that enables fish to drive wherever they want to go or MyFreeImplants.com, an entire website where women can receive donations so that they can afford a boob job. But now people can invest in something worthwhile (hopefully), a college education for cash-strapped students.

Next month, Purdue University will be accepting applications for students to finance their college education by having people pledge money to pay for their tuition.

The revolutionary idea, called “Back a Boiler” program, allows juniors and seniors to supplement their federal loans with private financial commitments. Essentially allowing students to sell stock in their future. The students pledge to pay back the loan once they graduate and are in the real world with a job and making money.

The school’s president, Mitch Daniels, described Purdue as “the national test bed” for these types of programs called income share agreements (ISA).

“I’m very careful to say that we don’t know if this will have wings or not,” said Daniels, who is also a former Indiana governor. “It might be a superior option at least for some students and if so, let’s go see.”

So a student majoring in anthropology, archeology or film, are more likely to be a stock, err, student that you would want to bankroll your own money in. Or if the student is at a party school with low graduation rates, might not be the stock worth your investment.

Market Watch gives an example on how the program would work:

“The school claims that a rising senior who plans on majoring in history and wants $10,000 through an income-share agreement would pay 3.97% of their income for 9 years to pay it off. Students planning to major in a more lucrative field would devote a smaller portion of their income to paying off the debt because their projected income is higher. For example majoring mechanical engineering with a $10,000 ISA would pay 2.82% of their income until they pay it off, according to a calculator on Purdue’s site.

In both cases students would spend a bit more than $13,500 to pay off the loan, according to Purdue’s projections. That compares to a $17,124 total cost for a private student loan for $10,000 at a 9% interest rate, according to the brochure. Parent PLUS loans for this past academic year had an interest rate of 6.84%.

The benefits to the student is that they pay a percentage of their income, and ISAs can be dismissed if the borrower goes bankrupt, a feat that’s nearly impossible to do with federal student loans.

Colleges benefit because it provides students with another channel for funds so that they can attend college even when they don’t have money or have exhausted all other financial avenues.

I’m so glad that this wasn’t an option when I went to college, I would have been the Blockbuster Video of worthless student stocks.


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