INDIANAPOLIS – Indiana lawmakers jumped all in with a novel income-sharing initiative meant to skill up Hoosier workers for high-paying jobs – recently putting $75 million in federal funds toward the untested program.
Similar but smaller financial aid efforts can be found around the nation, but none are statewide, said William Wozniak, vice president of marketing at INvestEd – the entity charged with scaling up the Career Accelerator program in the coming months.
“It's early days, so buckle up,” he said.
An income-share agreement is a contract in which you receive money for your education. In return, you promise to pay the ISA provider a fixed percentage of your income until your debt is gone.
Indiana's program focuses on credentials, certificates and degrees that a person can earn in six months or less. That is so Hoosiers can improve their skills quickly and then get high-paying jobs. It is ideal for unemployed or underemployed individuals.
Colby Shank, assistant vice president for student financial aid at Ivy Tech Community College, said Indiana's initiative is progressive because the person only pays back what they borrow – with no interest. And, more importantly, they don't have to repay unless they are making a certain level of annual income.
The law sets that at 75% of Indiana's median household income, which is currently about $43,000. And the monthly payment can never exceed 5% of anyone's monthly income.
“These are really student-friendly features,” Shank said.
The language was put into the state budget bill at the end of the session. Wozniak said it was created around a concept that Indianapolis tech entrepreneur Scott Jones has with his coding program called the Eleven Fifty Academy.
It's a one-time appropriation from federal COVID-19 stimulus dollars. Depending on individual program costs, it could help thousands of Hoosiers increase their skills.
Ivy Tech is one of many state educational providers reviewing their curriculum to see what programs might qualify for the initiative.
Any expertise could be covered – from information technology to advanced manufacturing. But to be certified by INvestEd – an education program must meet the following:
• At least 75% of enrolled individuals graduate from the program with a credential not more than six months after beginning.
• At least 65% of graduates obtain employment within three months of graduating.
• That graduates who obtain employment within six months of graduation earn average wages that are at least 20% higher than the wages the graduate earned before beginning the program.
• That graduates of the program earn an average wage that is at least 200% of the statewide per capita income within two years of graduation, which is currently about $60,000.
“What we are setting up is policies and procedures right now. You have to determine which are the programs that meet the legislature's goals,” Wozniak said.
“These are dollars that could help a lot of Hoosiers. But it's so new everyone is examining their metrics to see if they fit.”
That's exactly what Ivy Tech is doing.
Stacy Townsley, vice president of adult strategy and statewide partnerships, is poring over income data for Ivy Tech's graduates at one, three, five and 10 years out.
So far they believe at least a handful of programs meet the Career Accelerator criteria but only just met with INvestEd officials Friday.
“We are having to demonstrate outcomes required in the legislation,” Townsley said. “The challenge for us is we support part-time students who also need to work.”
Technically the program doesn't become effective until July 1, but Wozniak hopes some income-sharing agreements could be approved for late this year.
“With what's going on right now in education, families and potential employees are nervous about what they can do,” he said. “So, I think the creativity this provides is desired by a lot of Hoosiers. At the same time it makes program providers really stand by what they are offering. They have to back it up.”