Purdue uses students' future earnings as their financial aid
Students at Purdue University will be able to fund their education using a percentage of their future earnings. The “Back a Boiler” program will provide aid to rising juniors and seniors, with awards starting at $5,000.
According to The Washington Post, the program is designed for students who have financial need beyond what they receive in grants and federal loans. The agreement will require students to pay back their debt at differing rates, depending on the student’s expected income. The payments start six months after a student graduates, and the repayment period will last nine years or less, much shorter than it usually takes to pay back educational loans.
Depending on future earnings, students could be paying back more or less than the amount they originally received in financial aid. The program could cost students more if they land high-paying jobs.
Purdue is the first college to try this type of program, called an income-share agreement, in over 40 years.
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