#19 Access to Quality Education for ALL -Income Share Agreements– Is the future of education moving there?
Do our Learning Program, but Pay After you get a Job - something we wouldn't have believed to be true a few years back. This model incentivizes the education institute to make the student successful. If the students aren't successful, the education provider doesn't get paid. Simple!
This model is possible via Income share Agreements - ISAs are a debt-free alternative to education loans. It’s an investment Educational Institutes make in human capital.
I personally feel that the concept of ISAs comes in as a ray of hope for learners who have the potential but are unable to pay huge amounts upfront.
ISA Breakdown
The ISA is a financial agreement between the learner and the school. In the past, tuition was paid before you were allowed to take the program. If you stopped paying tuition, you were kicked out. ISAs turn that model on its head. You can walk into the program with next to nothing down(or a little upfront to ensure skin in the game). Once you graduate and get a job, you pay a set amount back each month until you’ve paid the ISA “cap”, which is your tuition cost plus the school’s profit margin.
With ISAs, learners across the country can now aspire to enroll in quality education programs by agreeing to pay back a specified percentage of their anticipated incomes when they get employed.
This gives wings to the youth, encouraging them to dream bigger and aim higher.
How are we doing it?
At GreyAtom, we absolutely believe in the potential that ISAs hold for competent learners.
We are consciously working in tier 2 and 3 colleges of India where hardworking and deserving learners don't have the right access. They happen to come from family backgrounds like agriculture, animal husbandry, and other rural occupations. We select the top learners from these colleges and encourage them to pursue their career aspirations with the help of ISAs, on their own merit - post a rigorous selection test.
They go through our learning programs - put in a lot of sweat and we start connecting them to companies looking for talent. They get a job and then they pay us back!
The way this enables their career trajectories to move in a different sphere altogether is phenomenal. They are able to increase their family incomes by at least 3X. A separate post on our journey with these learners is WIP - it deserves a much in-depth treatment.
We also incentivize mentors to get the outcomes for the learners. Additional teaching fees get unlocked for our mentors with learner placements. We call it Outcome Mentorship
We are glad that our thought process matches with this tweet by Erik Torenberg
The Challenges
Even so, while putting this down, ISAs are very much in a nascent stage, at least in India.
Mostly available for tech programs, we are yet to witness a huge adoption, across fields. The numbers of ISAs contracted are insignificant to draw a meaningful analysis.
However, some challenges that must be overcome -
ISA programs are difficult to establish because they require a large amount of upfront capital with significant investment risk.
Direct correlation with Job markets, if the economy goes through a downward trend and hiring freezes, revenues are directly impacted for the Education organization.
Checking for GRIT and determination in a learner becomes key, with high rates of learner attrition model can become unviable to run.
It is hard to have full transparency on learner income data in India, in case the learners do not report their hiring, With few regulations explicitly designed to govern the operation of ISAs.
Due to these challenges, there are many nay-sayers for this model. However, I hope that we work around these challenges and continue to drive education into increasingly skills and outcomes-based learning models, and force Academic institutions to have a greater stake in their learner’s success.
Right access to the right education is what will make a huge difference in the next decade and I see ISAs can play a very strong role in being able to do that. I hope policymakers explore the opportunities and risks that ISAs represent, establish a regulatory framework that ensures that both education institutions and learners are protected.
I join the next decade with great optimism and hope for an overall Inclusive Education.