WEST LAFAYETTE, Ind. – When Kai Mangiaracina, junior at Purdue University, hit the submit button for his application to the university Back a Boiler – ISA Fund for the current academic year, he had no idea his was going to become the 1,000th contract in the program.
He also had no idea that what was a milestone for the revenue-sharing agreement program, which offers students an alternative to Federal Parent PLUS and private student loans, was going to turn into a boon for him.
On Thursday, November 21, Mangiaracina learned that to commemorate the 1,000th contract, Back a Boiler will halve its current contractual obligation, or more than $ 5,000. For Mangiaracina, who also received funding from the program last year, it was a pleasant surprise.
“I’m speechless… and grateful,” said the South Lake Tahoe, Calif. Native, who specializes in mechanical engineering technology and virtual product integration. “Back a Boiler has helped me in many ways and allows me to pursue my dreams. I am happy to have found this program and proud to be a part of it.
Mangiaracina is one of hundreds of students who have benefited from Back a Boiler since the 2016-17 academic year, when Purdue became the first major US university to offer a revenue sharing agreement as an alternative to federal and private student loans.
“Making college education accessible and affordable is a guiding principle at Purdue, and our mission is to provide students with the tools necessary to make this possible,” said Heidi A. Carl, Executive Director of Financial Aid, Purdue. “Back a Boiler is an option, unique to Purdue, that we can offer to students who are evaluating their education funding options in a way that is both financially sound and personally manageable. “
Since its inception, Back a Boiler has issued just over 1,200 funding contracts to 760 unique students representing over 150 majors at Purdue. The program disbursed $ 13.9 million in funding.
When first offered, the program was limited to rising juniors and seniors enrolled in the fall and spring semesters. Due to student interest, in April 2017 Back a Boiler expanded to include all sophomores, juniors and seniors as well as students registered for summer sessions.
This fall, the number of Back a Boiler student contracts increased by more than 25%, and 44% of participants are students, like Mangiaracina, who already have a contract with the program and have returned for additional funding.
Mary-Claire Cartwright, head of the Back a Boiler program at the Purdue Research Foundation, said the continued growth shows the fund is serving as an equity-based option for students seeking to finance their education.
Back a Boiler was launched as part of Purdue Moves: Accessibility and Affordability, a multi-faceted program created by President Mitch Daniels to make higher education more affordable and reduce student debt. As part of Purdue Moves, tuition fees were frozen for seven years, and it is estimated that in fiscal years 2013-2019, Purdue families saved a total of approximately $ 465 million through fee deferral. tuition, fees and room and board of the university. increases.
Back a Boiler offers students and their families an alternative funding option in which a student receives education funding in return for an agreed percentage of post-graduation income over a set number of years. The payback period of the Back a Boiler – ISA fund is generally less than 10 years. An ISA has no principal or interest balance, so its payments adjust with the student’s income over the term of the contract, and payments do not start until the student is employed. and earns a defined minimum annual salary greater than $ 20,000. There is backside protection with a set of caps for students who do exceptionally well after graduation.
Students are encouraged to discuss Back a Boiler and other financial aid options with a financial aid counselor and their parents or guardians before choosing the program that is best for them. Back a Boiler is not intended to be an alternative to federally subsidized student loans. More information is available at https://purdue.edu/backaboiler/.
About revenue sharing agreements
Revenue sharing agreements were designed in the 1950s but were never implemented in any meaningful way until the Purdue program. Unlike a loan, an ISA has no principal or interest balance, so its payments adjust to the student’s income over the term of the contract. If a student earns less than expected, he is only liable to investors for the agreed percentage of actual income.
About the Purdue Research Foundation
the Purdue Research Foundation is a private, not-for-profit foundation created to advance the mission of Purdue University. Created in 1930, the foundation accepts gifts; administers trusts; funds scholarships and grants; acquires property; protects the intellectual property of Purdue; and promotes entrepreneurial activities on behalf of Purdue. The foundation manages the Purdue Foundry, the Purdue Office of Technology Commercialization, the Purdue Research Park and the Purdue Technology Centers.
Writer: Brian Zink, 765-404-9290, bgzink@prf.org
Sources: Heidi A. Carl, carlh@purdue.edu
Mary-Claire Cartwright, MCCartwright@prf.org