A participation contract (or ISA) is a financial structure in which a person or organization makes available to a beneficiary who, in return, agrees to repay a percentage of his income for a fixed number of years, something valuable (often a fixed amount of money). [With an ordinary student loan] my nominal monthly payment is set, but my income could change or disappear completely (making security a monthly repeat of bad news). In the case of an income-involved contract, it is the opposite: I do not know what my monthly nominal payment will be over the lifetime, nor the total amount I will pay, but I know I can always afford it. [11] A public university has its own ISA program with more than 160 participants in the past academic year, and several other colleges have launched isA initiatives or are considering launching their own ISA initiatives. Today, there is at least one company created in 2015 that exclusively facilitates agreements for training organizations. Price said ambiguity about the ISA has prevented many education providers from launching their own income-involved programs, but the new law would improve transparency. In the 1970s, Yale University tried a modified form of Friedman`s proposal with several cohorts of students. At Yale, all members of the cohort agreed to repay a percentage of the salary until the balance of the total cohort was paid, instead of entering into individual contracts for a certain number of years. However, the system left students frustrated with paying more than their fair share by being forced to pay on behalf of their peers who were not ready or unable to repay their loans. [6] Under a typical ISA, students agree to pay a percentage of their future income for a predetermined period in exchange for advance assistance with their courses. Today, it is possible that more students will have the opportunity to make such agreements, as congressional lawmakers are working on possible ground rules for agreements. Proponents of income-participation agreements argue that the funding model offers an alternative to private student loans and shifts the risk of borrowing from students to training providers and investors. The terms of the agreement vary from university to university, but as a general rule, the amount students will repay will increase with increased income.