When the program was officially launched in Messiah last fall, nearly half of the approximately 40 participating students were newcomers. Walker said for some of these students that the option of entering into an income participation agreement was taken into account in their decision to enroll. However, this expansion also exposes the same students to a market that, as long as it is not regulated, remains open to abuse. The introduction of safety slides in the income-involved space is essential to ensure a healthy ISA market that can serve more students. He said the idea of basing repayment on a student`s income should play a bigger role in designing the federal student loan system — an idea that has received some support from liberal and conservative political thinkers. However, James said the ISA project should allow the private sector to provide greater and more sustainable support to students. “We are trying to create funds that are community-based and accessible to every low-income person and every student within that community,” he said. The Lumina Foundation announced in July that it was funding a study to measure the impact of several revenue participation programs, including programs offered by the University of Utah, Colorado Mountain College and the San Diego Workforce Partnership. The new bill would also codify several protections for students. Currently, the market for income-participation agreements has no legal guarantees and depends on market ethics to give students a fair shake, both if they earn too little to get by and in cases where their incomes soar. Important provisions of the law guarantee the protection of students in contracts without specifying the necessary experiences in a nascent market. The loudest voice who has voiced concern about ISAs is Senator Elizabeth Warren, the Massachusetts Democrat who was running for the party`s 2020 presidential bid. In June, Warren and other Congressional Democrats asked several colleges associated with Vemo to provide documents on their promotion of income participation agreements and student protection.
However, there are significant differences of opinion on good federal oversight. Vemo supports the bipartisan laws introduced by young in July that would place ISAs under the responsibility of the Consumer Financial Protection Bureau. However, consumer advocates believe that the Ministry of Education also has a role to play in monitoring contracts. And Darcus argues that Senate legislation essentially provides exceptions in existing plans for income-participation agreements.