Student Debt

A reading/sourcing theme Kyle captured as an Index Ventures investing lens: student debt as the problem that education-financing startups exist to solve. The saved-reading cluster (below) is the skeptical and macro side of the file — the Fortune “student loans as economic bubble” piece, New America’s “Income share agreements aren’t the solution to student debt,” the urban/rural and gender breakdowns of who carries the debt, and the NYT DealBook coverage of Lambda School’s ISA model. It pairs directly with the sibling concept Income Share Agreements (ISA), which holds the constructive case Kyle heard across his calls — that financing should underwrite to future earning potential rather than FICO, and that ISAs are the less-predatory alternative for students who would otherwise be locked out of credit (e.g. the “90%+ of student loans require a co-signor” problem Tess Michaels raised at Stride Funding).

The two pages are deliberately split: Income Share Agreements (ISA) aggregates Kyle’s notes and the bull case, while this page holds the saved-but-not-yet-synthesized reading that frames the underlying problem and the critiques of ISAs as a solution (including the contrast with Lambda School’s steep monthly fees).

Context: US student loan debt exceeded ~$1.5 trillion by the late 2010s, becoming a central policy and political issue — and the implicit market that income-share-agreement startups positioned themselves against.

Quick Capture links — June 29th, 2021

• Fortune (2017): higher education / student loans as an economic bubble — https://fortune.com/2017/07/10/higher-education-student-loans-economic-bubble-federal/
• New America: “Income share agreements aren’t the solution to student debt” — https://www.newamerica.org/education-policy/edcentral/income-share-agreements-arent-solution-student-debt/
• NYT DealBook (2019): education / student loans / Lambda School — https://www.nytimes.com/2019/01/08/business/dealbook/education-student-loans-lambda-schools.html
• Axios: the urban/rural student-debt divide — https://www.axios.com/student-debt-urban-rural-divide-4418ba84-257c-4790-804c-efd40756c0a4.html
• Fortune (2018): women and student loan debt — https://fortune.com/2018/06/05/women-student-loan-debt/
• NYT Opinion (2018): student debt, loan default, and college — https://www.nytimes.com/interactive/2018/08/25/opinion/sunday/student-debt-loan-default-college.html
• Mother Jones (2018): debt, loan forgiveness, Betsy DeVos, FedLoan — https://www.motherjones.com/politics/2018/08/debt-student-loan-forgiveness-betsy-devos-education-department-fedloan/

Where this appears

• Income Share Agreements (ISA) — sibling concept; ISAs are framed as a response to the student-debt problem this page collects, and the ISA page cites this saved-reading cluster for the skeptical case.