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Photo: Flatiron School

Amid a political uprising against student debt, some colleges and skills schools are offering a tuition scheme in which students commit to paying a fixed percentage of their after-graduation salary for five or more years.

What's happening: The system, called "Income Share Agreements," responds to what many experts call a student debt crisis: some 44 million Americans now owe some $1.5 trillion, and most of the Democratic presidential candidates are calling for some form of free college or trade school, and debt forgiveness.

  • ISAs look a lot like loans, and typical terms result in students paying back 150% to 250% of the original tuition.
  • But loans have much the same results, and ISAs are missing a key downside to straight borrowing — you shouldn't be able to default on one because you typically only start repaying once you are employed and earning a certain minimum income.

Driving the news: In an announcement on Thursday, the Flatiron School, a data bootcamp owned by WeWork, said it will fund $100 million in ISAs to future students. Offered in WeWork offices and in online versions, Flatiron courses are $15,000 in tuition.

  • After graduation, you begin repaying the tuition at 10% of your gross salary as long as you are earning $40,000 or more. If you earn, say, $70,000 a year, you would end up repaying $21,500 over approximately five years.
  • "In any month they are not employed or earning the equivalent of $40,000 or more a year, they don't pay. With student loans, you owe regardless of if you work," said Adam Enbar, CEO of the Flatiron School.

The backdrop: The idea of promising a portion of your future income as a form of investment in your potential goes back to 1945, and a book by Nobel laureate economists Milton Friedman and Simon Kuznets.

Many experts call student loan programs a favorable aspect of the U.S. higher education system since they allow students to go as far as they can academically, all the way through a world-class doctorate. "If you are going for a master's degree, there is no limit to what you can borrow. You can do income-based repayment," said Kevin Carey, an expert at New America.

  • But many student also get in over their head, either from borrowing too much or failing to get a job paying enough.
  • So in 2016, Purdue University, reaching back to the Friedman-Kuznets idea, began a still-small trend among universities by offering ISAs to its students.

The bottom line: ISAs are not the answer to the student-debt problem. In a vocational school such as the boot camps, they offer financing for students who cannot afford to pay monthly. Experts say that, in most cases, loans are still the best option for financing college. "Because ISAs are a shiny object, it doesn't mean they are the best option," Carey said.

Go deeper

First look: Senators propose bill to ban corporate PACs

Sens. Jon Ossoff and Mark Kelly. Photos: Chip Somodevilla (left), Courtney Pedroza/Getty Images

Sens. Mark Kelly (D-Ariz.) and Jon Ossoff (D-Ga.) will soon propose a bill prohibiting for-profit corporations from establishing and managing political action committees, according to a copy of the legislation obtained by Axios.

Why it matters: The introduction of "The Ban Corporate PACs Act" comes amid heightened scrutiny on Capitol Hill regarding money in politics, including efforts to bar companies from influencing political campaigns and federal elections. It would likely face a court challenge and First Amendment concerns.

Exclusive: YouTube shuts down two Oath Keepers channels

Stewart Rhodes, founder of Oath Keepers. (Photo: Aaron C. Davis/The Washington Post via Getty Images)

YouTube has deactivated two channels linked to the Oath Keepers militia group whose members have been charged in relation to the January 6 Capitol riot, the company told Axios.

The big picture: Social media platforms that were used to plan or promote the Capitol attack have moved with varying degrees of speed to bar the accounts involved.

FAA clears more planes after 5G fears

Photo: David McNew/Getty Images

The Federal Aviation Administration said Thursday it had approved nearly 80% of the U.S. commercial fleet to perform low-visibility landings at airports with new 5G services after fears of signal interference limited 5G rollout.

Why it matters: The FAA approvals will help provide more certainty after the agency raised fears that 5G signals could reduce the accuracy of certain equipment, known as radio altimeters, that helps planes land and take off in inclement weather.

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