SBPC Launching Income Share Agreement Conference and Paper Series: Using Consumer Law To Protect Student Loan Borrowers

By Seth Frotman and Tariq Habash | July 16, 2020

Over the last few years, a new wave of risky products known as income share agreements (ISAs) have emerged across a spectrum of higher education programs as a purported alternative to traditional federal and private student loans. ISAs are financial products designed to cover educational costs in exchange for a fixed percentage of a borrower’s future wages. Unfortunately, some ISAs have already caused borrowers harm, such as deceiving borrowers about the true cost of an ISA or using a global pandemic as a marketing ploy.

And rather than operate within the existing consumer protection framework, proponents of ISAs have instead claimed that their products are different from the rest of consumer finance—that these products are not credit and that the laws on the books do not apply to them. Hiding behind a “desire for regulatory clarity,” the companies peddling these products lobby federal and state officials across the country seeking statutory carve-outs and outright exemptions from the consumer protection laws they claim do not apply to them, putting students increasingly at risk.

Borrowers deserve better.

Today, the SBPC is announcing an unprecedented exploration into the role that consumer protection laws play in safeguarding borrowers from the harms posed by ISAs. Over the next month, we will release a paper series, authored by legal experts at the forefront of consumer law, exploring how ISAs fit into existing consumer financial protection framework.

This series will build a strong legal foundation for policymakers and regulators as they seek to rein in these risky products, including:

  • How ISAs are governed by existing federal laws that regulate credit and debt;
  • How laws prohibiting discrimination apply to and govern the pricing and underwriting of ISAs; and
  • How state attorneys general, financial regulators, and individual borrowers can use state law to push back against an industry that has held itself out to be above the law.

Over the course of the next month, the SBPC will also host a virtual conference on ISAs. Across three separate panels, advocates, legal experts, industry representatives, and state law enforcement officials will dive deeper into this body of research and its implications, further scrutinizing the ways that contemporary ISAs fail to meet existing consumer protection standards, and examining the critical role regulators and law enforcement officials must play in protecting borrowers.

We hope you will join us: Emerging Risks Virtual Conference Homepage


Seth Frotman is the Executive Director of the Student Borrower Protection Center. He previously served as Assistant Director and Student Loan Ombudsman at the Consumer Financial Protection Bureau, where he led a government-wide effort to crack down on abuses by the student loan industry and protect borrowers.

Tariq Habash is Head of Investigations at the Student Borrower Protection Center.