SACRAMENTO (CBS13) – The University of California and California State University may test out an income sharing program with students as a way to make school more affordable.
Students in their Sophomore, Junior, or Senior years could apply and have their school costs covered. Six months after graduating, as long as that student earns at least $20,000 a year, the graduate would pay a portion of their income back to the school each month. That percentage would be established at the start and would not change, regardless of whether that student earns more or less each year.
The agreement between the school and the student would last up to ten years after the student graduates, but that can be extended by the amount of months a graduate doesn’t earn the minimum amount.
The program would also cap how much a student ultimately owes; however, students would agree that the amount he or she ends up paying back may be more or less than the amount the school provided to him or her.
The pilot program is being proposed to start in the 2020-21 school year at one campus each in both the UC and CSU systems.
Under Assembly Bill 2479, the schools could impose certain eligibility requirements and cap the number of participants based on how much money is available in the pilot program. That money would come from a newly established “Income Share Agreement Revolving Fund.” The money for that fund would come from the yearly state budget and from participating graduates.
Purdue University in Indiana has a similar program called “Back a Boiler” (the school mascot is the Boilermaker.) That program started in 2016 and has provided $5.9 million in Income Share Agreements to nearly 500 students in approximately 80 majors, according the the analysis done of AB 2479.
Assemblyman Randy Voepel (R-San Diego County) authored AB 2479 and said it would help students manage the debt they incur while in school. California students in the Class of 2015 graduated with an average of more than $22,000 in loan debt.
The bill did pass the Assembly. It’s being heard by the Senate Education Committee on Wednesday.