Unlocking Opportunity at Texas Christian University: Are Income Share Agreements the Master Key?

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Matt Williams, Class of 2020


As the nation’s growing student debt obligations surmount $1.6 trillion, some post-secondary education institutions are investigating innovative solutions for college financing to replace traditional loans. Income Share Agreements (ISAs) represent a popular strategy for some trade and state universities; through legal contracts, these institutions assume the burden of remaining education costs after grants and scholarships in return for a predetermined percentage of the student’s future income over a specified time period. This thesis will investigate the viability of ISAs specifically at private, nonprofit, four-year institutions, using Texas Christian University (TCU) as a case study. Using a multivariate distribution of correlated stochastic variables, Monte Carlo simulation generated thousands of possible net present value (NPV) scenarios for ISA contracts with the Neeley School of Business, the site of a potential pilot program. Most business major ISA contracts demonstrated a probability greater than 98% to return a positive NPV. These findings solidify recommendations to implement such a pilot program within the Neeley School of Business with the hopes of expanding these financial aid tools to all major programs in future years. An income share program at TCU could not only unlock opportunity but also maintain the university’s financial stability in a time of economic downturn.

Comments from Mentors

Matt’s undeniable intellectual curiosity fueled his ability to successfully explore the challenging world of financial aid in higher education.  Using a structured approach, Matt quantitatively and qualitatively analyzed the financial, operational, and reputational opportunities and challenges associated with income share agreements.  At every turn, Matt brought energy, enthusiasm, and empathy as he approached the project from the view of students, families, and institutions seeking effective solutions that might unlock the door of opportunity for broader educational attainment and upward social mobility.  Matt’s work is insightful, timely, and lays the groundwork for follow-on conversations at TCU and beyond.

Dean Daniel W. Pullin

Matt is an outstanding researcher: he is creative, resourceful, meticulous, and sharp. I believe he is the most self-motivated student I have ever worked with and is an example to others in the classroom and out. In his work studying income share agreements, he has shown a relentless pursuit of truth and accuracy, and he has not been fazed by the theoretical and empirical complications that arise in truly original research. Rather than pursuing the goal of doing work that is “good enough” or even “outstanding,” he seeks for his research to make a positive difference in the real world--his motivation transcends self interest and even passion for the topic. In this case, he seeks to facilitate development of a market that can put universities and students in a partnership that benefits both as they solve the problem of educational funding. Because of his diligence and intelligence, he is in a good position to do that. It is my feeling that Matt embodies the best of TCU’s values: academic excellence, innovation, and character.

Dr. Grant Farnsworth 

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Neeley School of Business