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INVESTING
We face dual crises of declining college affordability and crushing student debt. There is $1.2 trillion in student debt owed by 37 million borrowers, 5.4 million of whom have already defaulted.
Teens take on tens of thousands of dollars of debt without a clue about the implications of 10 to 20 years of repayment. Many graduate (or don't-even worse) with little hope of meeting monthly payments, leading to bankruptcy or blemished credit reports for life.
Nobel Prize-winning economist Milton Friedman proposed a novel solution to today's crises in 1955. Under an Income Sharing Agreement, a student receives a fixed amount of money now to pay for educational expenses and in exchange agrees to pay back a percentage of his or her income for a fixed period following graduation. ISAs enable students to borrow against their future earnings to pay for college.
College is...