The Purdue Research Foundation has raised $10.2 million to fund its Back a Boiler income share agreement program that provides an alternative for Purdue University students to Federal Parent PLUS and private student loans.
David Cooper, Purdue Research Foundation’s chief investment officer, said Fund II was closed in late October with a total of 11 investors, including four institutional investors, one multi-strategy hedge fund, one family office and five individual investors. The $10.2 million is expected to fund the Back a Boiler program for the next three years. Two years earlier, the initial funding for Back a Boiler raised $6.3 million with a total of three institutional investors. Purdue University was the first major research university in the U.S. to offer an income share agreement
“The diverse pool of investors and the substantial growth of the fund is a strong indication of the growing interest in income share agreements as an alternative to Parent Plus and private loans to pay for higher education,” said Brian Edelman, president of Purdue Research Foundation. “Also, the growth of the program will enable us to help even more students with financial need pay for their Purdue education without accumulating debt.”
The Back a Boiler ISA Fund launched during the 2016-17 academic year when it distributed just more than $2 million to about 160 juniors and seniors in 79 majors. The foundation expanded the program to include sophomores for the 2017-18 academic year.
To date, the foundation has distributed nearly $9.5 million to 759 student contracts. Those students represent more than 120 unique academic majors. The top seven colleges represented are engineering, science, Polytechnic Institute, health and human sciences, liberal arts, Krannert School of Management and agriculture.
Back a Boiler offers students and their families an alternative financing option in which a student receives education funding in exchange for an agreed-upon percentage of post-graduation income over a set number of years. The Back a Boiler – ISA Fund payback period is about 10 years. An ISA has no principal balance or interest, so its payments adjust with the student’s income over the life of the contract and payments do not begin until six months after the student has graduated, is employed earning a minimum annual salary of $20,000.
The Purdue Division of Financial Aid and Purdue Research Foundation are now accepting applications for the Back a Boiler program for Spring Semester of Academic Year 2018/19. Students and parents or guardians who want to learn more about the program are encouraged to visit BackaBoiler.org for additional information about Back a Boiler, an FAQ about the program, eligibility requirements and a comparison tool to compare an ISA to some of the other financial aid options that may be available to students.