The Top 3 ISA Investors

70% of four year universities will never have Income Share Agreements (ISAs) because they “know their tuition is overpriced and unconnected to the economic value of their degrees”.

ISA Investor – The Economist

ISAs, are an innovative and disruptive way to finance higher education. They provide funds to students for tuition, and are repaid once the student graduates and secures a job above a certain income. Depending on the exact structure of the ISA agreement between the educator and the student, the repayment is typically capped in terms of the total amount paid back. When structured correctly, ISAs incentivize investors to find schools, universities, and bootcamps that are providing an education with real return on investment for students. This focus on student ROI is their most salient feature.

Given their potential, I went looking for the investors that partner with schools to provide ISA financing to students. We know from The Economist that the total market size is small:

Some 3,000-5,000 American students have used ISAs to cover $40 million in tuition costs, estimates Charles Trafton of FlowPoint Education Management, which creates and invests in ISAs. For comparison, in the 2016-17 academic year, private student loans totalled $11.6 billion.

Here they are…

Top 3 ISA Investors

  • FlowPoint Education Management
    • $100M financing partnership with Noodle Partners and Massmutual to create and fund online university programs using ISA student financing.
  • Vemo Education
    • $23 million in ISAs last academic year
  • Long Term Education Investment Fund (Leif)
    • $20M partnership with Lambda School

Honorable Mention

  • Skills Fund:
    • Uncertain, but similar in scale to Vemo and partnered with Iowa Student Loan for funding.


The Career Cycle

Tonight, I was thinking a lot about the idea of lifelong learning and how it relates to the world of work. The idea of lifelong learning is to allow your innate sense of curiosity about the world to lead you down new paths. We all pursue these paths in our personal lives by reading books, watching movies, or traveling. However, there is a working version of this as well that I call the Career Cycle:

Career Cycle.png

We have tended to view careers as linear trajectories from the bottom level of a corporate hierarchy to the top. However, these linear paths are increasingly rare. Instead, we find ourselves in a cycle:

  • We strive for actualization:
    • We want to enhance our learned abilities
    • We want our job to more closely align with our interests
    • We want it as fast as possible
  • We work hard:
    • We gain experience through our work
    • We find opportunities to teach ourselves or learn from others
    • If we’re lucky, we’re coached along the way
  • In the process, our abilities are enhanced and our work interests change
  • We start the process all over again, by searching for that next level of self actualization, from our position of newfound abilities and career aspirations

This mental model allows those of us in the world if work and higher education to map our organization’s activities against the Career Cycle, and ask the hard questions:

  • How are we helping workers to assess and benchmark their abilities?
  • How do help workers match their interests to the jobs we’re asking them to perform?
  • How can we help workers gain the exact education and experiences that will lead them to the jobs they are interested in doing?
  • How can we help them progress as fast as possible towards these goals?

In the future, I will be looking for ways to explore how organizations and tools are helping individual workers at each point in the Career Cycle.

Cultural Incompatibility: Apprenticeships in America

In the workforce community, pretty much everyone looks across the pond at Europe and fantasizes about the Swiss or German work cultures where apprenticeships are an integral part of the higher education experience.

I feel similarly and would relish transporting this unique cultural element to a corner of the United States to see if it would work. On the other hand, I am extremely proud of this country and our culture of innovation, which those same European countries absolutely do not have. At the end of the day, we have the work culture we have, and we need to work within its confines to be successful.

Here are three, cultural reasons, why apprenticeships have failed to thrive in America:

First, our culture values immediacy and instant gratification. We expect new hires to “hit the ground running” and to “fake it till you make it”. On the other hand, apprenticeships delay the “gratification” of having a fully functional employee on Day 1. Instead, there is no “hitting the ground running”, there is 6-24 months of training and mentorships in before such high expectations can be placed on the employee.

Our work culture values finding “the best” person for a given role. Out of the box, apprentices by definition are not the “best” at their jobs, because they are still learning. Hence, could hiring an apprentice be an admission of a recruiting “failure” that the “best” could not be found. Even worse, could it indicate that “the best” don’t want to work “here”?

Our culture values a sense of fairness. However, it is “fair” for apprentices to have weekly 1-on-1 meetings with their supervisors and active mentor/mentee relationships, when regular employees often go a year or more without a 1-on-1 feedback session and often have to recruit their own “mentors” from within the firm? Maybe this just feels like so much special treatment in a corporate culture that values the ability to “Get S*** Done” for yourself.

These are very loose hypotheses and I have no data to back them up. I am just searching for psychological and emotional reasons to account for why something, which on paper seems like such a great idea, struggles to gain currency in the real world. Hiring managers are not jumping out of their seats to hire apprentices or setup apprenticeship programs, and it would be enlightening to understand why.

If you have any ideas of your own, please share…