Presenter: Landon Work, Huntsman School of Business, Economics and Finance
Authors: Landon Work, Evan Bullard, Josh Smith
Faculty Advisor: Josh Smith, Huntsman School of Business, Center for Growth and Opportunity
Institution: Utah State University
Income-share agreements are a new trend to finance education in the United States, especially among trade schools. An investor funds education for a young prospective money-earner in return for a portion of their income. However, they have not gained traction because there is no clear answer to the question, "What are they?" Are they equity like investors claim or are they indentured servitude? Are they pernicious or benign? I break down income-share agreements and show that they are nothing more than a principal-free form of debt, one that is an acceptable choice for many seeking to improve their employment opportunities.