Day: August 17, 2022

In 2016 Purdue University announced an income-share agreement program as a guinea pig experiment in which students could get money for college in exchange for a cut of their future earnings. “Back a Boiler,” it was called, in a nod to the school’s Boilermaker nickname. University president Mitch Daniels talked up the idea in testimony to Congress. 

Intrigued, other university leaders wanted in. “We’re looking at what Purdue University is doing now, and we are thinking about it,” said Sheila Bair, then president of Washington College. In subsequent years, Purdue’s program won a think tank’s award for most innovative public policy proposal, and at least 14 other colleges or universities launched similar initiatives.

So Purdue’s announcement in June that it was suspending the Back a Boiler program came as a thunderclap in the world of income-share agreements, or ISAs, and could signal the beginning of the end of experiments involving college students splitting their future paychecks with investors. 

The number of schools offering ISAs is sliding down the far side of the bell curve as several other accredited colleges or universities have ended or paused their programs. It’s a sign of fraught times for these schools and for the training boot camps that offer ISAs, with lawsuits mounting, federal and state governments imposing restrictions, and students reporting mixed satisfaction.

Purdue’s pause points to bigger problems in the ISA industry. One reason Back a Boiler has been suspended is that program servicer Vemo Education went out of business, says Brian Edelman, president of the Purdue Research Foundation. (Two other Vemo clients—Messiah University and Colorado Mountain College—also reported that the company has shut down, though the company doesn’t appear to have made a formal announcement. It did not respond to inquiries asking for confirmation.) 

A year ago, Vemo was sued by 47 former students of a for-profit coding academy called Make School; the students alleged that Vemo and Make School colluded to run a high-cost ISA program that violated state and federal laws forbidding unfair or deceptive business practices and false advertising. The students had agreed to repay 20 to 25 percent of their pre-tax income each month for three and a half years or more, with monthly payments as high as $2,500; some students signed contracts under which they would owe as much as $270,000. 

There’s another reason for Back a Boiler’s pause: clampdowns by the federal government on certain schools that offer ISAs. In a consent order last September issued by the federal Consumer Financial Protection Bureau against several private ISA providers, the bureau concluded that the schools had violated federal law by falsely telling users that ISAs weren’t loans and don’t create debt. A sample contract on the Back a Boiler website, for example, notes that “This is not a loan or credit.” 

In March, the Department of Education told accredited colleges and universities that, following on that order, they also must treat ISAs as loans, which have stricter rules requiring that students be allowed to pay them off early to save money. The protection bureau’s order interrupted the Purdue Research Foundation’s conversations with investors about an additional round of ISA funding, and Purdue decided to pause the program, Edelman said. 

It’s not just Purdue: Seven other accredited colleges or universities that once offered ISAs told The Hechinger Report that they’ve either paused or ended their programs. Only four of the fifteen schools contacted said they’re continuing; three schools didn’t respond to inquiries.

The strength and durability of cement has made it a staple building material around the world, but engineers from the Royal Melbourne Institute of Technology in Australia have finally come up with a way to manufacture it at a lower cost by swapping in some recycled materials.

Making concrete uses a fairly simple recipe. A binding agent, which is usually a paste-like material called portland cement, is mixed with water and aggregates: a combination of sand, rocks, and gravel. Adjusting the amount of the various ingredients can alter the properties of the concrete, making it stronger or lighter as needed, but some of the items on the ingredient list, like larger stones and gravel, can increase the price, particularly in parts of the world where those materials aren’t always readily available.

One way to help reduce the cost of making concrete is to replace the aggregate with other materials, including used rubber tires that have been ground up into small particles. The idea kills two birds with one stone, as it’s also a smart way to recycle the millions of worn down rubber tires removed from vehicles every year. But to date, engineers have only managed to create concrete that meets required strength standards using a combination of rocks and rubber.

The problem, as the engineers at RMIT University hypothesized in a recently published research paper, is that the rubber alternate has too many pores. During the initial mixing process, the water fills the pores in the rubber particles, but when it eventually dries and that water evaporates, what’s left is countless voids and gaps between the rubber and the cement around it, weakening the bond and reducing the strength and quality of the concrete.

The solution to replacing all of the aggregate material in concrete with recycled tire rubber was to place the wet ingredients into steel molds that compress the mixture with pressure to eliminate all of the rubber’s pores. After drying, the resulting concrete exhibited a much stronger bond between the hardened cement and the rubber particles, giving it a 97% increase in compressive strength, and a 20% boost in tensile strength.

That’s a big increase, but still not quite enough for the rubber tire concrete to be used as a reliable structural element, so the researchers are looking into other ways to reinforce and strengthen it even further. And while the new approach may increase manufacturing costs, in the long run, it should still prove to be a more cost effective alternative to traditional concrete. That’s because, in addition to using cheaper source materials, it results in a lighter material that’s easier and cheaper to ship.