Income Share Agreements: A Solution to the Student Loan Debt Crisis or a Welcome Mat for Discrimination?

"3 Approximately 11.6 million jobs have been created since then, but ninety-nine percent of them have gone to applicants with at least some form of a college education.4 As a result, obtaining a college degree in the United States is an important, if not essential, step to earning higher or any wages at all.5 Unfortunately, for an increasing number of young Americans, traditional student loans are the principal option available for financing their education.6 Lenders rarely determine, however, whether these borrowers are likely to be successful in securing fulltime employment that will allow them to repay their debt upon graduation.7 Nonetheless, there is hope that things will change as policymakers and loan administers are becoming more aware of the problem. An ISA is a contract between a student and his or her educational institution that commits the student to pay a percentage of his or her earnings for a fixed period after graduation in return for the cost of the student's education.9 ISAs, in their technical sense, take a sharp departure from the traditional practices of lending for higher education, such as private or federal student loans.10 Mainly, they alter the potential repayment burdens for students post-graduation, because payments are income-driven and based on the graduate's earnings, rather than being based on a pre-determined principal plus interest formula and a mandatory repayment schedule.11 For instance, if a graduate is unemployed, generally, monthly payments are suspended or significantly lowered until employment is secured.12 In this context, ISAs undoubtedly have the ability to mitigate the growing $1.5 trillion student loan debt facing our country.13 Nevertheless, the administration and structure of ISAs are currently controlled by the private-sector and are unregulated by the federal government.14 Without a regulatory framework, ISAs have the ability to cause harm, specifically in effectuating discriminatory and predatory practices. [...]solutions include: (1) implementing improved educational tools for high school and college students regarding their lending options, (2) the establishment of explicit oversight authority by the Federal Trade Commission ("FTC") and the Consumer Financial Protection Bureau ("CFPB") for the implementation and administration of ISAs on college campuses across the United States, and (3) lastly, the use of the Truth in Lending Act ("TILA") and the Equal Credit Opportunity Act ("ECOA") as means of relie