Colleges replace loans with 'income-sharing'

As college students head back to campus, they're carrying a heavy burden. According to, Americans now owe almost $1.48-trillion – yes, trillion – in student loan debt.

Now, a handful of colleges and universities are experimenting with an alternative: Taking a slice of students' salaries after they graduate. 

Once grads start working, they pay back a percentage of what they make for a set period of time in what's called an "income-share agreement."

"I think it's a good idea. You have an actual job, you can budget your money," local student Innara Basria observed.

Student Marina Martinez had questions. "I work in career services and there are so many diverse incomes and earning potentials for students. Is it one flat rate? Is it based on income? On the field they go into afterwards?"

Some people think the programs give colleges greater incentive to guide students to high-earning jobs after graduation. For others, the programs are seen as less risky than taking on student loans.

The length and the salary percentage can vary.

Norwich University, a private military college in Vermont, is the latest to give it a try. They're working with Vemo Education, a firm that's collaborating with around 30 public and private accredited colleges and universities, to design income-share programs. 

But don't get too excited.  This type of program can't sustain itself across an entire student population.

“Sounds great -- in theory,” USF economics professor Christopher Jones offered.  "But then who pays for that?"

Jones uses the example of trying to fund medical school via income share. "If that has to come from the schools – if, for 8 years, that becomes a million-dollar education, that means you've got less money for engineers, economists – to fund people in other disciplines."

It would require either taxpayer dollars or private donors to fund it up front. That's why for those offering the program, it’s treated more like a scholarship the few and fabulous win, rather than a solution for the masses.