Purdue graduate slams alternative student loan, suspended by the university: ‘It was extremely difficult, before I got my monthly payments down, to be…

Purdue graduate slams alternative student loan, suspended by the university: ‘It was extremely difficult, before I got my monthly payments down, to be…

June 21, 2022 Off By administrator

When former Purdue University student Matt Wilmsen decided to try a new loan-financing program that would help him avoid traditional student debt, he didn’t expect himself to be constantly grappling with the servicing of his loan for his $29,000 in student debt.

From dealing with miscommunication between his college and the loan servicer, who ended up adding thousands of dollars in missed payments and jacking up his monthly bill, to them poorly handing off his account to a new loan servicer, Wilmsen said he was at his wit’s end trying to deal trying to stay on top of his loans.

“It was extremely difficult, before I got my monthly payments down, to be able to pay rent, buy food,” Wilmsen said. “I called [the loan servicer] multiple times and told them this and they were very unsympathetic… this whole situation was brought about because Purdue made a mistake.”

‘I don’t want other people to have to go through some of the stuff that I’ve been through.’


— Matt Wilmsen, a Purdue University graduate,

Income-share agreements, known as ISAs, are an alternative type of student-loan financing where a borrower receives a loan, then pays a percentage of their income after graduation. The terms of an ISA depend on various factors, such as their major and projected future earnings.

ISAs are considered a type of private student loan by the government. Recently, the Consumer Financial Protection Bureau, a consumer watchdog, said that the ISA industry cannot claim exemptions from rules governing student lenders.

The  West Lafayette, Ind.-based university’s Back a Boiler program, launched in 2016, offers ISAs to students seeking alternatives to traditional federal and private student loans. 

Earlier this month, the university said it had suspended the program. “If it’s actually shut down, that would make me feel good,” Wilmsen said, “because I don’t want other people to have to go through some of the stuff that I’ve been through.”

Wilmsen’s story about his ISAs, alongside others’ experiences, offers a cautionary tale for students seeking an alternative to taking on piles of loans for their education, amid a national conversation over the student-debt crisis.

‘They implied that this loan was better than private loans and federal student loans, and that you’ll end up paying less per month and in total than you would on federal student loans,’ Matt Wilmsen said.


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