Scott Russian possesses 15 years of experience in the finance industry. As the director of finance at Stride Funding, Scott Russian works with a next-generation higher education funding provider that offers Income Share Agreements (ISAs) to ensure that repayment plans are commensurate with career earnings.
An early 2021 Stride Funding white paper, “ISAs: Towards an Outcomes-Driven Solution for the Student Loan Crisis,” explores shortcomings in the present system of higher education funding. Current practices have created a student debt crisis in which tuition has doubled over the past two decades. Some 45 million students hold an outstanding student debt total of approximately $1.6 trillion.
Despite a lack of rewarding careers and unsustainably high educational costs, the line of college loan applicants only grows longer. The reason is simple: adults who graduate from college, on average, earn $20,000 more per year than those who only graduate from high school. The differences are even more pronounced in high-demand fields, such as STEM and health care, in which jobs outpace the overall market.
An ISA concept was initially placed into the public debate by Nobel Prize-winning economist Milton Friedman in the 1950s. The concept is that dividends on student loans, which are akin to “investments in human capital,” should be contingent on the future earnings of students. Those who face unemployment or have incomes under a predefined threshold should not have to make student debt payments.
