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ISAs are a good idea, but there's no way you can start a hyper-profitable business around it. It's literally a ponzi scheme under those circumstances as the total amount of students "pending" will always exceed those who are paying out as the mandate is to grow.

The potential solutions are three fold:

1. Limit growth of students - impossible if your organization received venture capital.

2. Reduce the cost to educate - Unfortunately if you make education a commodity, ironically it will be replicated, leading to alternatives, ultimately leading to (1).

3. Guarantee the loans somehow

I think the only type of organization that could pull it off is one that doesn't mind waiting a long time to do it sustainably. Probably a not-for-profit. Alternatively, you could sustain it by doing it at a loss, e.g. you have some other organization to ensure (3).




I believe that's why you do the ISA packaging described in the article where you sell the ISAs off to the get the cash to keep going while someone else gets to think about the long-term cash flows. Banks do the same thing with loans.

This all works unless the instruments aren't audited well where the risk is higher. (think: ratings agencies in the housing crisis) Here the risk is that payback is bad, but we don't know yet, so investors are left holding the bag.

This latter scenario is really only bad for the investors and wastes the student's time, but then again the current college system already does this, so at least this doesn't shackle them with debts they can't pay.

Of course later investors won't buy the ISA packs if they first blow up, but seemingly no one gets hurt if it all goes up in flames.


You should read the attached article because it’s not structured as a one-off sale; it’s actually aligned between student and school, with the focus being repayment cashflow.


Even better - but for clarity, it's still generating some cash up front, addressing OPs question.




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