Many short trade school programs, such as welding or dental assisting, don't qualify for federal student loans, leaving lower-income individuals without financing options for these critical pathways to stable jobs. At the same time, these students often face financial vulnerability due to upfront costs and income volatility. One way to address this gap could be through income share agreements (ISAs), where students receive tuition funding in exchange for a fixed percentage of their future income once employed.

How Income Share Agreements Could Work

Under this model, an organization—such as a nonprofit or fintech startup—could cover tuition for students in selected trade programs. Graduates would then repay a small percentage of their income (e.g., 10% for 5 years) only if they earn above a set threshold, like $30,000 annually. Key features might include:

• No upfront debt or interest, making repayment manageable.
• Focus on programs with strong job placement rates to reduce risk.
• Additional support, such as career counseling, to improve employment outcomes.

Benefits for Stakeholders

This approach could align incentives across multiple groups:

• Students: Access education without traditional debt.
• Trade Schools: Increase enrollment and diversify funding.
• Employers: Gain a pipeline of skilled workers.
• Investors: Earn returns while supporting social impact.

Execution and Challenges

A pilot program with 2-3 high-placement trade schools could test feasibility, tracking repayment rates and employment outcomes. Scaling up would depend on initial results, possibly expanding to more programs or developing a digital platform for applications. Challenges like regulatory uncertainty or low graduate earnings could be addressed through transparent terms, legal compliance, and forgiveness clauses after a set period.

Compared to existing models like Purdue's ISA program or Lambda School's tech-focused approach, this idea could stand out by targeting shorter, vocational programs with moderate repayment terms—filling a gap in education financing for non-traditional students.