A Debt-free Education Funding Option: Income Share Agreements

As college tuition prices climb and the volume of student loan debt continues to rise, policymakers have sought a new financing mechanism to solve the problem. One idea generating considerable interest is Income Share Agreements (ISAs), which are proposed as a debt-free alternative to traditional student loans. In this paper, AAF explains ISAs and examines the benefits of and concerns surrounding ISAs.

Heads Up America: Free College Doesn’t Get You What You Want

In this year’s State of the Union Address President Obama announced an initiative to provide two years of free community college. States would be required to opt into the proposed program and commit 25 percent of the necessary funding. Schools receiving the dollars would be required to adopt evidence-based reforms to improve student outcomes as well as create programs that provide occupational training or fulfill transfer requirements to 4-year schools. In return the federal government would pick up the remaining 75 percent of funding for tuition and fees. The program is estimated to cost the federal government $60 billion ($20 billion for states) over 10 years.

Performance Based Funding: A New Approach to Funding Elementary and Secondary Education

U.S. taxpayers spend at least 5.4 percent of the nation’s Gross Domestic Product (GDP) funding elementary and secondary education, and the current Federal practice for funding schools is based almost exclusively on attendance. This funding method is a fundamentally flawed model that misaligns incentives, rewards sub-par performance, and diminishes the imperative for significant and sustained educational outcomes. School funding, as Michigan Governor Rick Snyder wrote in 2011, “should be based upon academic growth and not just whether a student enrolls and sits at a desk.”

E-Rate Program Expands 123 Percent in New Proposal

Under proposed changes currently being circulated by Federal Communications Commission (FCC) Chairman Wheeler the E-rate program is set to expand nearly 123 percent from 2008 levels. The program, which provides funds to schools and libraries for telecommunications services, has been the target of reform for years due to its onerous requirements. Instead of streamlining the process and ensuring that the neediest schools receive assistance, the new plan merely expands the program without the overdue reforms.

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