Instead of paying off tuition while attending college, Brenau University students will have the option of waiting until after graduation.
Brenau announced on Monday, Aug. 19 its partnership with Vemo Education to provide Income Share Agreements, or ISAs, to its students. Vemo designs, implements and manages these agreements with colleges and universities throughout the U.S.
Brenau is the first Georgia university to launch an Income Share Agreement program.
The financing option is an agreement in which a student pays a fixed percentage of their income after graduation. The payments are made for a defined period of time in exchange for tuition up-front.
Kristen Bowman, Brenau’s director of communications and media relations, said through the university’s Income Share Agreement, “students will have 10 years in which 4.8% of their income goes back to the university to pay for their education.”
The monthly payments will begin once the graduate’s income exceeds $20,000 a year.
Since the percentage is fixed, Bowman said it will remain the same, but the payment itself could go up or down if the person’s income increases or decreases during those 10 years,.
Brenau will allow a six-month grace period after a student graduates from the university to start paying the monthly fees.
David Barnett, Brenau’s executive vice president and chief financial officer, said this option will only be available senior students.
“It’s a way for those who are almost finished to find different ways to fund their last year of college, so they don’t have to stop, go to work, come back and pick up where they left off,” Barnett said.
He said Brenau has examined this opportunity for around a year.
When students look into pursuing an Income Share Agreement, they’ll sit down with a counselor to determine whether or not it’s right for them.
“This just gives them one more option to get through programs without having to interrupt their progress,” Barnett said.
Purdue University in Indiana has already jumped on the Income Share Agreement funding option. Purdue Research Foundation established the “Back a Boiler,” which provides this type of agreement to rising sophomores, juniors and seniors.
Bowman said that the biggest difference between an Income Share Agreement and a student loan is the lack of an interest rate.
“There’s no interest rate attached at all,” she said. “It’s not a loan, which can be an advantage. They truly are only paying what they owe.”
This report has been updated from its original version.