Messiah has launched a new initiative to allow students to pay back tuition through a percentage of their future career. The model is called the income share agreement and will be launched June 1.
Students who participate will pay between 3 – 3.5% of their post-graduation income for a set period of time to pay back the reduced tuition they received.
“Income share agreements (ISAs) are beneficial as payment amount adjusts according to levels of income which stands in stark contrast to how student loans work,” Assistant Professor of Finance Dwayne Safer said.
Safer also explained that ISAs have features such as a minimum income threshold and payment cap. These ensure that students who use the program will not have to pay if their income after graduation is not at a minimum level of $25,000. On the other hand, those who earn a substantial amount of income will not pay above a certain amount.
“This feature alleviates the fear that often comes with traditional student debt that may push students to pursue a job rather than their chosen career path in order to make the fixed payments associated with their student loans,” Safer said.
Messiah launched this model in order to make tuition more affordable for students. “We are confident in the quality of education that students are receiving and want to be aligned in their future success,” Safer said.
Vemo Education will help develop the program for Messiah. Vemo is an education technology company that helps to implement income share agreements in colleges.