(Repeats with no change in text)
By Caren Bohan and Julia Edwards
WASHINGTON, April 9 U.S. Republican Senator
Marco Rubio, a possible 2016 White House contender, will unveil
legislation on Wednesday to broaden the use of financial
vehicles known as "income share agreements" that students can
use to fund their higher education costs.
Under the agreements, which are marketed as an alternative
to traditional student loans, private investors or organizations
provide students with financing for their education costs in
exchange for a percentage of their future earnings.
"The same way that private investors invest in a business
idea, they could invest in a person who basically says: 'This is
who I am. This is what my career goals are. This is what I've
done so far. This is what I intend to major and graduate in. And
in return, when I graduate, I will pay a percentage of my salary
over a defined period of time in return for that investment,'"
Rubio told Reuters in an interview on Tuesday.
Some companies including Upstart, developed by former Google
employees, and Pave already offer the financial instruments.
But the legislation Rubio is proposing is aimed at making
the vehicles more widely available by providing a legal
framework for them.
"Many players have resisted getting into the marketplace
because they're not sure of the legal certainty behind it. The
fact that it's now a recognized investment vehicle would allow
more players to get into the space and could encourage more to
come forward," Rubio said.
The Florida lawmaker added the legislation would also
establish new legal protections for both investors and students.
Companion legislation on the "income share agreements" is
being offered in the House of Representatives by Republican Tom
Petri of Wisconsin. Petri said the financial instruments would
not replace traditional student loans in many cases but
The amount of outstanding student loan debt has eclipsed
that of auto loans and credit cards in the United States,
according to the Federal Reserve Bank of New York.
Rubio has often talked in speeches about how he graduated
from law school with close to $150,000 in debt. He paid off the
debt with the proceeds of his 2012 autobiography, "An American
(Reporting by Caren Bohan and Julia Edwards; Editing by Peter