With student loan balances at $1.6 trillion, a new financial instrument is attracting attention (“New Kind of Student Loan Gains Major Support. Is There a Downside?” The New York Times, Dec. 24). Students who sign a legally binding document called an income-sharing agreement pay a certain percentage of their earnings over a fixed period. If they make more than they owe, they pay more. If they make less, they pay less.
If income-share agreements catch on, I believe they have the potential to make students think what they should major in. Critics will argue that the value of a bachelor’s degree should not be based on its marketability alone. Otherwise, colleges will become merely trade schools. I understand that view, but critics need a reality check. Students have to be able to pay their bills after graduation. They can’t live on passion alone.
The days when few people graduated from college is over. With so many degree holders, the ability to hit the ground running after graduation is essential for sheer survival.
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