UCSD Extension Tests New Way To Pay For School
UC San Diego Extension launched a new way to pay for school this month — called an Income Share Agreement, or ISA. It’s a type of contract where a student’s tuition costs are paid for by the school upfront. A student then agrees to pay back up to 8% of their future income for a set amount of time, but that’s only if they make more than $40,000 a year after graduating.
“It’s definitely a big shift for the university, but we know that a rapidly changing labor market, the increasing costs of education and student debt, necessitate changes in how higher education is financed. The university sees this as potentially a really interesting, progressive, consumer-friendly solution to a much more macroeconomic problem,” said Josh Shapiro, Assistant Dean of Research and Evaluation at UC San Diego Extension.
The ISA program is currently limited to tech-industry certificates, like digital marketing and business analytics. Shapiro said the first cohort had 50 slots for about 500 applicants. They hope to grow to 200 students by next year.
“What’s really interesting about this program is that we’re looking to serve unemployed and under-represented individuals. So that means there’s no academic requirements, no GPA. There’s no financial history. We don’t pull a credit check on individuals,” Shapiro said. “We look at various zip codes. We look at people who are on CalFresh or other governmental support services. We’re really doing it on a need basis…if you look at our demographics for our first cohort, they look very different than a typical technology employee. We have 55% women. We have 70% minorities and underrepresented individuals. So this was a very purposeful and intentional solution to a problem.”
The findings of the pilot will go towards RAND Corporation’s research on ISAs. It is part of a national push to find alternatives to the current federal student loan program ahead of the growing national student debt crisis.
RELATED: San Diego Workforce Partnership Developing Student Loan Alternative To Boost Job Training
Earlier this year, San Diego Workforce Partnership had been working on getting grant money with the ISA idea in mind. Now the idea has become a partnership with UCSD Extension. San Diego Workforce Partnership then received donations from Google, Strada Educational Network, the James Irvine Foundation and a private citizen to kick start the program. The 'pay-it-forward' model means as the first group of students graduate and get jobs, they repay the school, which will then use that money to fund future students.