How to Build an Income Sharing Agreement Product(moderntreasury.com)
moderntreasury.com
How to Build an Income Sharing Agreement Product
https://www.moderntreasury.com/journal/how-to-build-an-income-sharing-agreement-product
71 comments
Is it just me or does it seem like we're now one step closer to turning people into companies with shares that can be bought and sold? It feels like a small step from ISAs for education funding to ISAs for all kinds of funding instead of traditional loan agreements and at that point you might as well sell shares of yourself to the highest bidder so they can trade your future income on a secondary market. (Note this is reminiscent of some aspects of the novel The Unincorporated Man).
Which leads us back closer to the ugly reality of people owning other people. ISA used to stand for Indentured Servitude Agreement.
(Not saying Incoming Sharing Agreements's are bad, we just have to be careful...)
(Not saying Incoming Sharing Agreements's are bad, we just have to be careful...)
Fortunately, indentured servitude was outlawed, along with slavery, by the passage of the 13th amendment.
Of course, the constitution is only as powerful as we are willing to follow it -- but I'm pretty comfortable that the slope between people agreeing to pool their income voluntarily and people being forced into servitude isn't all that slippery.
Of course, the constitution is only as powerful as we are willing to follow it -- but I'm pretty comfortable that the slope between people agreeing to pool their income voluntarily and people being forced into servitude isn't all that slippery.
Finally someone said it. Thank you.
I don't disagree with you, but I'll note that the non-dischargeable terms of medical and student loan debt in the USA essentially do that already, with the added caveat of not even incentivizing the note holder to get the borrower on their feet. Is this no better than that? I think it's moving in the right direction. It's capped, and while there's still the potential structural issue of middleman taking an unfairly sized cut, the incentive structure of "we don't make money unless our education helps you do so" seems like an order of magnitude better than the alternative.
>I don't disagree with you, but I'll note that the non-dischargeable terms of medical and student loan debt in the USA essentially do that already
As a preliminary matter this is false...student loans are dischargable in bankruptcy, they are just treated differently than other debt. However, there is a reason everyone thinks student loans aren't dischargable and the myth persists...
>the incentive structure of "we don't make money unless our education helps you do so" seems like an order of magnitude better than the alternative.
Not when the real alternative is student loan forgiveness and free tuition moving forward. The issue is framing the problem as student loans for life or a financier owning a % of your labor for life, when there are other models.
As a preliminary matter this is false...student loans are dischargable in bankruptcy, they are just treated differently than other debt. However, there is a reason everyone thinks student loans aren't dischargable and the myth persists...
>the incentive structure of "we don't make money unless our education helps you do so" seems like an order of magnitude better than the alternative.
Not when the real alternative is student loan forgiveness and free tuition moving forward. The issue is framing the problem as student loans for life or a financier owning a % of your labor for life, when there are other models.
Regarding student loans, yes, you are technically correct that they are dischargable in bankruptcy. However, the standard for federal student loans is that the borrower must be in a situation where there’s literally no hope of ever paying them back in order to qualify. This makes them _de facto_ nondischargable.
Private loans, IIRC, are dischargable with a lower standard, but it escapes me what the standard actually is.
Private loans, IIRC, are dischargable with a lower standard, but it escapes me what the standard actually is.
>This makes them _de facto_ nondischargable.
I have gotten student loans ($100k+) discharged for clients.
My experience is most people who say student loans are not dischargable have never gone through bankruptcy and have no idea what the process is to discharge regular debts nor student loans. This is true of even some lawyers, who are more than happy to take your fee, but don't know what they are actually doing.
I have gotten student loans ($100k+) discharged for clients.
My experience is most people who say student loans are not dischargable have never gone through bankruptcy and have no idea what the process is to discharge regular debts nor student loans. This is true of even some lawyers, who are more than happy to take your fee, but don't know what they are actually doing.
Student loan forgiveness would be great, as would be free tuition, but do you mean on a federal level? I'd love to see such a policy come to fruition.
Vote for Bernie if you want these things to happen. We can literally discharge all existing student debt by rolling back Trump’s ridiculous tax cuts for the wealthy. Tuition can be funded the same way going forward.
I don't want to make it about politics or a politician, but you can search for their campaign platform proposal for additional details. As far as I know there is only one candidate running on this platform of student loan forgiveness, so it should come up quickly in a search.
It's great to have a presidential candidate that is running on this platform (and I think I know which one you're talking about), but I'm more interested in whether the broad coalition in congress exists, or whether it's being formed. There are a few members of congress I can think of, but not in remotely the size necessary to pull this off.
>I'm more interested in whether the broad coalition in congress exists
Seeing as no "mainstream" political party candidate is running on this platform, I think the answer is no. Of course, I would probably say the same of any campaign issue any mainstream candidate is running on due current political climate of our 2 party system.
Whats interesting is if this candidate won the election, perhaps the 2 parties would have no choice but to concede the issue, if for nothing else to realign themselves with their own constituents and win back their votes. Then again maybe we can extend the market saying "the market can remain irrational longer than you can remain solvent" to politics "political parties can remain irrational longer than you can vote."
Seeing as no "mainstream" political party candidate is running on this platform, I think the answer is no. Of course, I would probably say the same of any campaign issue any mainstream candidate is running on due current political climate of our 2 party system.
Whats interesting is if this candidate won the election, perhaps the 2 parties would have no choice but to concede the issue, if for nothing else to realign themselves with their own constituents and win back their votes. Then again maybe we can extend the market saying "the market can remain irrational longer than you can remain solvent" to politics "political parties can remain irrational longer than you can vote."
Glumly inclined to agree with the latter half of your analogy there, that "the market can remain irrational longer than you can remain solvent" is to "political parties can remain irrational longer than you can vote." On the other hand, there's power in numbers, and I keep wondering if some kind of equivalent to crowdfunding will emerge for lobbying and/or local politics. So much of the visibility seems to be at the national level, but a ton of the clout in terms of how things get done occurs on the city, township, county and state level. On one hand, that makes it a combinatoric explosion of complexity, in that you have 1:N:N:N just to get up to the state level, but it also lowers the boundary towards critical mass significantly. What's interesting here is that it looks like this has already been happening; at least from my end, I saw a significant amount of this sort of activity in the 2018 midterms. To some, it looked a little bit like a referendum. My question is how much further is needed for the critical mass to be achieved? Is it predicated on a generational shift?
This article doesn't really go into it, but the impetus from what I gather is to try to find a viable alternative to the current system that balances practical realities with various ideals or goals.
Historically, college was an upper class pursuit because the upper classes could afford it. You introduce student loans and then instruments to make them more easily accessible to anyone, you end up with the current debacle.
Part of the cause of the current debacle is the fact that it takes more than the right degree to establish a sufficient income to make traditional student loans make sense. You also need job hunting skills, availability of good paying jobs and a personal situation conducive to working full-time. This means no health crises, unexpected pregnancies or other family problems imposing on your time.
What we've learned is that the bet involved in the current student loan process is a bet that still leaves a lot of lower class people in a situation where college is a bad bet that may just deepen their financial problems and de facto keep them trapped in poverty.
I don't know if this solution is the right solution, but I do think the goals and ideas driving these experiments are healthy impetuses. We need to continue to try to find societal patterns and practices that help lower income people have the opportunity to rise. It's better for society overall.
The tendency for the principle of "them that has, gets" to deepen class divides is one that needs constant push back. Otherwise, it foments bloody revolution.
We already have memes like "Eat the rich" which point to deep resentment and bitterness of the "peasant" classes. You would have to be a fool to think that's not anything to be concerned about.
Historically, college was an upper class pursuit because the upper classes could afford it. You introduce student loans and then instruments to make them more easily accessible to anyone, you end up with the current debacle.
Part of the cause of the current debacle is the fact that it takes more than the right degree to establish a sufficient income to make traditional student loans make sense. You also need job hunting skills, availability of good paying jobs and a personal situation conducive to working full-time. This means no health crises, unexpected pregnancies or other family problems imposing on your time.
What we've learned is that the bet involved in the current student loan process is a bet that still leaves a lot of lower class people in a situation where college is a bad bet that may just deepen their financial problems and de facto keep them trapped in poverty.
I don't know if this solution is the right solution, but I do think the goals and ideas driving these experiments are healthy impetuses. We need to continue to try to find societal patterns and practices that help lower income people have the opportunity to rise. It's better for society overall.
The tendency for the principle of "them that has, gets" to deepen class divides is one that needs constant push back. Otherwise, it foments bloody revolution.
We already have memes like "Eat the rich" which point to deep resentment and bitterness of the "peasant" classes. You would have to be a fool to think that's not anything to be concerned about.
Bowie Bonds for all:
https://en.wikipedia.org/wiki/Celebrity_bond
https://en.wikipedia.org/wiki/Celebrity_bond
Be careful what you wish for.
Shares of this nature would be regulated as securities. Which would bring a great many uncomfortable requirements to the table.
Just as a for instance, I'll just point out that corporations have Boards of Directors and shareholder meetings. Both of which potentially determine and direct any future actions the corporation is allowed to take.
Shares of this nature would be regulated as securities. Which would bring a great many uncomfortable requirements to the table.
Just as a for instance, I'll just point out that corporations have Boards of Directors and shareholder meetings. Both of which potentially determine and direct any future actions the corporation is allowed to take.
I think this is how the social media influencer market works.
Perhaps it is. However, interestingly to note, most religions, like traditional Christianity and Islam, would actually be okay with an income sharing system (especially if the share was redeemable and payments set up to accomplish this) as opposed to an interest based system. It is unclear that an income sharing system is any morally worse than an interest bearing one, and there are reasons to think it is better.
Given that interest-bearing loans eventually convert to ISAs if they aren't paid (through wage garnishment), it seems hard to argue that they aren't strictly worse for the borrower.
ISAs are not wage garnishment though. My ISA would be tied solely to the amount you're making and a non-interest-bearing predetermined price. Wage garnishment is a form of interest sharing, sure, but the underlying liability is growing at an exponential rate, which is what would be wrong.
It used to be society wanted people to have an education and that people with degrees would get higher paying jobs which resulted in a net benefit to society through higher taxes.
Now education is just looked at as a way to in debt young people for the rest of their lives. Because 1M people default on their student loans every year and the bubble is on the verge of popping, the parasites are looking to own 10% of every dollar you make to finance your education.
The problem isn't that an API doesn't exist to automatically debit 10% from the people you own, the problem is an education doesn't get you a job anymore, much less a high paying job.
Instead of owning peoples labor via API, why not consider the 1 Presidential candidate who is campaigning to forgive all existing student debt and make college free moving forward by god forbid...taxing the same banks the taxpayers bailed out from bankruptcy just 10 years ago.
Now education is just looked at as a way to in debt young people for the rest of their lives. Because 1M people default on their student loans every year and the bubble is on the verge of popping, the parasites are looking to own 10% of every dollar you make to finance your education.
The problem isn't that an API doesn't exist to automatically debit 10% from the people you own, the problem is an education doesn't get you a job anymore, much less a high paying job.
Instead of owning peoples labor via API, why not consider the 1 Presidential candidate who is campaigning to forgive all existing student debt and make college free moving forward by god forbid...taxing the same banks the taxpayers bailed out from bankruptcy just 10 years ago.
A world where algorithms trash your CV if it doesn't have the phrase "B.A." or "B.S,", and where the cost of that keyword is an irrevocable tithe on 10% of your human output.
My lord, people, this might be a bad idea.
My lord, people, this might be a bad idea.
At first you mention how higher education doesn't get you a good job anymore, but then you mention support for a candidate who will make college free. Don't you see the contradiction here? The reason college graduates have difficulty finding good jobs compared to the past is because so many people have a degree. Even if you forgive all of the student loans and make college free, people still won't find jobs based on college. College might not even get you anywhere because it'll become a default requirement for every job. There will be some other criteria used instead and somebody's probably going to make money off of that too.
There just aren't enough jobs that require the qualifications of English literature majors or similar.
There just aren't enough jobs that require the qualifications of English literature majors or similar.
>Even if you forgive all of the student loans and make college free, people still won't find jobs based on college.
Having educated unemployed people is bad yes, but its an infinite improvement on millions of educated unemployed people saddled with debt they will never in their life times be able to pay off.
Having educated unemployed people is bad yes, but its an infinite improvement on millions of educated unemployed people saddled with debt they will never in their life times be able to pay off.
That’s still better than the present, where college still doesn’t really get you anywhere, except in a mountain of debt.
But if that's truly the case then shouldn't people not go to college? If there aren't enough benefits then people should be able to realize that, no?
a Job isn't the only benefit of an education...an education is a benefit in and of itself. Society benefits from having an educated public. Society does not benefit from being in debt.
Your logic is as follows: if college degree doesn't get a job, then don't go to college.
Your logic breaks down because not going to college isn't going to get you a job either.
Your logic is as follows: if college degree doesn't get a job, then don't go to college.
Your logic breaks down because not going to college isn't going to get you a job either.
"The problem isn't that an API doesn't exist to automatically debit 10% from the people you own, the problem is an education doesn't get you a job anymore, much less a high paying job."
In classical education if you don't get a high paying job it's your problem not the university's because they've already been paid. The whole idea behind this change is to shift some of that risk of un/underemployment to the university. So if the university isn't able to get you the high paying job they promised that's their problem too(b/c they don't get paid).
In classical education if you don't get a high paying job it's your problem not the university's because they've already been paid. The whole idea behind this change is to shift some of that risk of un/underemployment to the university. So if the university isn't able to get you the high paying job they promised that's their problem too(b/c they don't get paid).
>In classical education if you don't get a high paying job it's your problem not the university's because they've already been paid.
I don't think that "classical education", in classical education students were able to get part time jobs and pay their own way through school...there we no such things as student loans.
This concept of having to sell off parts of your future productivity at the ripe age of 17-18 is only being conceived because the federal government student loan guarantees and runaway artificial tuition costs supported have already imploded.
Nevertheless, these programs are not paid for/proposed by the universities themselves, but by investors...no matter what the college/university gets paid upfront, and they have no skin in the game.
I don't think that "classical education", in classical education students were able to get part time jobs and pay their own way through school...there we no such things as student loans.
This concept of having to sell off parts of your future productivity at the ripe age of 17-18 is only being conceived because the federal government student loan guarantees and runaway artificial tuition costs supported have already imploded.
Nevertheless, these programs are not paid for/proposed by the universities themselves, but by investors...no matter what the college/university gets paid upfront, and they have no skin in the game.
>The problem isn't that an API doesn't exist to automatically debit 10% from the people you own
Something's just really wrong about that statement. It saddens me. Didn't we fight a war to put an end to stuff like this?
Also, a president is not going to wave a magic wand and fix this system. If you want to support that candidate, by all means do so, it's one of the habits of healthy hearts and minds in a democracy. Just realize going in what's actually possible and what's political marketing. Fixing this is going to take a lot more work on everyone's part than simply casting a vote.
Finally, the wealthy should pay more. No argument from me on that one. Having said that, there is a game theoretical optimum on how much you should tax each person in a society. We don't want to get carried away with taxing anyone for political reasons. Liberals do that with anything that will disproportionately stick it to bankers, and conservatives have done that with anything that will disproportionately stick it to blacks. (The recent Reductio Ad Absurdum of conservatives demanding that college athletes pay taxes on scholarships is an example I'm guessing you might appreciate of how political targeting can get just a bit ridiculous.)
Something's just really wrong about that statement. It saddens me. Didn't we fight a war to put an end to stuff like this?
Also, a president is not going to wave a magic wand and fix this system. If you want to support that candidate, by all means do so, it's one of the habits of healthy hearts and minds in a democracy. Just realize going in what's actually possible and what's political marketing. Fixing this is going to take a lot more work on everyone's part than simply casting a vote.
Finally, the wealthy should pay more. No argument from me on that one. Having said that, there is a game theoretical optimum on how much you should tax each person in a society. We don't want to get carried away with taxing anyone for political reasons. Liberals do that with anything that will disproportionately stick it to bankers, and conservatives have done that with anything that will disproportionately stick it to blacks. (The recent Reductio Ad Absurdum of conservatives demanding that college athletes pay taxes on scholarships is an example I'm guessing you might appreciate of how political targeting can get just a bit ridiculous.)
>Just realize going in what's actually possible and what's political marketing. Fixing this is going to take a lot more work on everyone's part than simply casting a vote.
You're not wrong, but at the same token why are Presidential candidates always speaking about things like: taxes; immigration; same sex marriage; healthcare?
The President doesn't control any of those things, doesn't have those powers...that's all the legislature.
While it may be just marketing for a candidate to say they will forgive existing students loans and provide for free education paid for by taxing the banks on what are currently tax free transactions...if that candidate wins, the 2 political parties will begin listening to voters and do what it takes to win their votes back.
You're not wrong, but at the same token why are Presidential candidates always speaking about things like: taxes; immigration; same sex marriage; healthcare?
The President doesn't control any of those things, doesn't have those powers...that's all the legislature.
While it may be just marketing for a candidate to say they will forgive existing students loans and provide for free education paid for by taxing the banks on what are currently tax free transactions...if that candidate wins, the 2 political parties will begin listening to voters and do what it takes to win their votes back.
The currently proposed legal framework for ISA's[0] seems like it would make ISA's dischargeable in bankruptcy, which would likely cause all sorts of issues with people signing up for them, using them to pay for tuition, and then immediately taking on as much delinquent debt to declare bankruptcy. That seems like a very perverse incentive for schools to deal with, since degree's are permanent but bankruptcy only stays on your credit report for a bit.
[0] https://www.forbes.com/sites/alisongriffin/2019/07/18/a-rare...
[0] https://www.forbes.com/sites/alisongriffin/2019/07/18/a-rare...
I believe the idea behind "income sharing" is that there is no demand for payment when there is not sufficient income. This makes it hard to qualify for bankruptcy, which is based on your ability to meet monthly debt obligations.
Clearly default and a lifetime of ruined credit is the better option.
Literally nothing can result in a lifetime of ruined credit other than a lifetime of not paying your bills.
Except student loans in the USA. They can't be discharged and the debt never goes away. Unpaid student loans will haunt you forever.
Like I said. A lifetime of not paying your bills.
[deleted]
> student loans in the USA. They can't be discharged and the debt never goes away.
Yeah, this is a common myth. Student loan payments in the US are limited to 10% of discretionary income for up to 20 years. If you make too little to pay off your loans on the standard 10 year plan you aren't just saddled with the debt forever.
https://studentaid.ed.gov/sa/repay-loans/understand/plans/in...
Yeah, this is a common myth. Student loan payments in the US are limited to 10% of discretionary income for up to 20 years. If you make too little to pay off your loans on the standard 10 year plan you aren't just saddled with the debt forever.
https://studentaid.ed.gov/sa/repay-loans/understand/plans/in...
> Student loan payments in the US are limited to 10% of discretionary income for up to 20 years.
No, they aren’t. You can choose an income contingent repayment plan that is limited that way, but it's not the default and servicers steer people beat served by those plans away from them in favor of staying on the standard plans and taking deferments.
No, they aren’t. You can choose an income contingent repayment plan that is limited that way, but it's not the default and servicers steer people beat served by those plans away from them in favor of staying on the standard plans and taking deferments.
Yeah, federal loans. Private student loans are basically usury.
I'm saying that bankruptcy at 22 or however young is the much better option. You get it discharged before 30, and so it doesn't even impact the terms you get if you're trying to buy a house for a lot of people. If your options are bad credit for 7 years in your 20's, or 250k in debt, then everyone is going to choose the bad credit every time.
maybe that's how it should be. Then kids wont get approved for 250k loans due to the risk and colleges will have to either ask for more money upfront (good luck), expect less students (not good for funding), or lower tuition.
Bankruptcy is ten years now, for what it’s worth.
I generally like the concept of ISAs.
The current system in the US incentivizes colleges to provide an exclusive "luxury" experience, regardless of cost. Here the incentives are more properly aligned.
In addition, ISAs place a natural cap on college cost. Where cost could previously grow without bound (all loans are backstopped by the federal government), now cost is tied directly to the prevailing wage of the graduate. To the extent that wages signal the needs of the economy at large, I'd assume that ISAs would increase the number of graduates in in-demand fields at the cost of some fringe benefits.
The big losers in this equation are the lesser-paid but still socially valuable professions such as teaching. However, it's unclear to me that these skills could not also be delivered at significantly lower cost (as they were several decades ago).
The current system in the US incentivizes colleges to provide an exclusive "luxury" experience, regardless of cost. Here the incentives are more properly aligned.
In addition, ISAs place a natural cap on college cost. Where cost could previously grow without bound (all loans are backstopped by the federal government), now cost is tied directly to the prevailing wage of the graduate. To the extent that wages signal the needs of the economy at large, I'd assume that ISAs would increase the number of graduates in in-demand fields at the cost of some fringe benefits.
The big losers in this equation are the lesser-paid but still socially valuable professions such as teaching. However, it's unclear to me that these skills could not also be delivered at significantly lower cost (as they were several decades ago).
The biggest downside to the rise of ISAs is the decline of the humanities. There are some majors where the cost of educating the student is simply more than the school would earn in a lifetime of work, but they still have value to society. We would need some way to account for that in a world where ISAs fund all education.
How do we incentive schools/lenders to fund people who want to study art and literature? Or should we?
How do we incentive schools/lenders to fund people who want to study art and literature? Or should we?
You incentivize this by attacking the problem directly - which is to realize that the cost of education is not rising due to scarcity, its rising because of misguided administrative practices and budget allocations.
Quality educational materials are certainly not more scarce today than they were 50 years ago, or somehow astronomically more expensive today.
Quality educators are not astronomically expensive and costing students more. In fact, educators are being chased from the classroom because we treat professors and teachers as a cost center and have systematically eliminated long-term confidence in career stability by replacing career professors with graduate students and adjuncts.
Quality educational materials are certainly not more scarce today than they were 50 years ago, or somehow astronomically more expensive today.
Quality educators are not astronomically expensive and costing students more. In fact, educators are being chased from the classroom because we treat professors and teachers as a cost center and have systematically eliminated long-term confidence in career stability by replacing career professors with graduate students and adjuncts.
There is, however, quite a bit more demand for college degrees today than 50 years ago.
Your comment reminded me of this article from a few weeks back: https://www.nytimes.com/2019/09/20/business/liberal-arts-ste...
STEM careers are and likely always will be a solid choice. But liberal arts aren't as bad as pop culture would make them out to be.
STEM careers are and likely always will be a solid choice. But liberal arts aren't as bad as pop culture would make them out to be.
basic supply demand. Less supply, more demand = higher salary = more students. There is obv equilibrium point.
Alternatively, https://leif.org/ can manage all of this for you.
Disclosure: I work at Leif
Disclosure: I work at Leif
I find it interesting the recent rapid rise of ISAs. I remember back in 2013/14, hearing Upstart pitch to my college for their ISA program. From what I recall, their pitch fell mostly on deaf ears. You can still see their ISA agreement online funnily enough:
https://www.upstart.com/funding_terms
But they discontinued it in 2014: https://slate.com/business/2014/05/upstart-pulls-income-shar...
It's not clear to me why the market pull for ISAs has grown so much recently, although I am happy to see it as an alternative to debt. Perhaps it's the increasing student loan debt burden in the US? Perhaps capital markets opening up to ISAs as an investment vehicle as well?
It's not clear to me why the market pull for ISAs has grown so much recently, although I am happy to see it as an alternative to debt. Perhaps it's the increasing student loan debt burden in the US? Perhaps capital markets opening up to ISAs as an investment vehicle as well?
I think the tech boom/talent shortage has a lot to do with it. It seems fairly unprecedented that a smart person with no education can take a ~1 year course, then reliably expect to be making a significantly above average salary immediately, and a six figure salary within a few years.
I'm wondering why it's just now they've become popular. Maybe they just needed a successful initial usecase and found it in Lambda School (unless I'm missing another successful ISA use case before Lambda School).
Regardless, it's great to see Modern Treasury build a solution to make ISAs simpler to implement.
Regardless, it's great to see Modern Treasury build a solution to make ISAs simpler to implement.
Relevant podcast about baseball players forming pools to share their earnings: https://www.npr.org/2019/10/25/773493342/episode-947-some-of...
How gross. Seems like a poorly thought out product -- isn't my incentive here as a borrower to avoid making documentable income?
Or setup a contracting corporation, accumulate your consulting income in the corporation. Have a home office. Pay yourself as little as possible to cover living expenses during the 5 year period and accumulate all the capital in your corporation. Pay your 10% on that small amount. Cash out the corporation afterwards, possibly over several years to lower tax burden.
I have a feeling that would be a breach of contract due to fraud. I also think that since you were able to come up with it, other smart people would be, too, and some of them would be people drafting these income share agreements.
Usually these financial engineering schemes gloss over obvious defects and stick the investor with the risk.
The whole reason that student loans are non-dischargeable is that medical students would become doctors, then leave the country for enough time for debt to go away.
The whole reason that student loans are non-dischargeable is that medical students would become doctors, then leave the country for enough time for debt to go away.
Sure it's vaguely does but most fields people would go into for college degrees don't generally do work undocumented. Also the loan company has an opposite incentive to track down anyone doing that and unlike the IRS they're not hamstrung by Congressional attempts to bleed them dry.
Undocumented doesn’t mean washing dishes for cash.
Your spouse sets up an LLC, which employs you at minimum wage to be a contract worker or consultant. This already happens in government contracting where small companies have a leg up of they are female, minority, or veteran owned.
Your spouse sets up an LLC, which employs you at minimum wage to be a contract worker or consultant. This already happens in government contracting where small companies have a leg up of they are female, minority, or veteran owned.
That's documented though and since the ISA client is working well below the prevailing wage the ISA originator could take them to court/arbitration and prove they're acting fraudulently absent any explanation of why they're working for so much less than they should be.
So... share-cropping, basically?
And we're basically back to where we were 300 years ago, where you had to give part of your income to your feudal lord.
Only reason (as a college student) don’t like ISAs is because they take up to something as ridiculous as 10 million over a 10 year period (if you do happen to make that much). I think ISAs may find a place for a greater majority of America though.
Isn't that the whole point? The very successful ISA participants are subsidizing the less successful ISA participants. An ISA with an income cap is just a loan with a lot more downside for the lender.