Purdue Backs Off Income-Share Agreements

Josh Moody:

An early adopter of income-share agreements, Purdue has paused new enrollments in its plan, citing servicing challenges amid the switch to a new vendor. Critics won’t be sad to see them go.

Purdue University has paused new enrollments in its income-share agreement program, a financing mechanism both praised as a bold experiment to make college more accessible and criticized as a predatory scheme that traps students in dodgy and expensive contracts.

Known as Back a Boiler, the program was quietly paused earlier this month, with a message posted on Purdue’s website around the same time that President Mitch Daniels announced his forthcoming retirement and a successor was selected through a secretive search process.

Purdue officials say suspending Back a Boiler is a technical matter, citing a change from one vendor to a different one that doesn’t originate new income-share agreements but will continue to service existing ones. Critics, however, believe that pausing new enrollments marks the death of the Back a Boiler program.

Other higher ed observers wonder what the pause signals for the future of such agreements.