Legislation that would establish a student loan refinance program using income share agreements to pay back portions of those loans has been introduced in the Pennsylvania Senate.

Sen. Ryan Aument, R-Lancaster, introduced two bills Feb. 18 that he said were aimed at easing the weight of the student loan debt crisis on current students and graduates, while emphasizing the importance of personal responsibility and protecting taxpayers.

"Higher education is bankrupting an entire generation, serving as a barrier, rather than a pathway to economic opportunity for far too many," Aument said. "The skyrocketing cost of college is leading younger generations to take on 300% more student loan debt than their parents' generation.

"If we fail to address this crisis, it will have ripple effects on every aspect of our economy. We need to find common-sense solutions that will help Pennsylvanians repay and meet their student loan obligations, under reasonable terms, without freeing them entirely from their personal responsibility to do so."

Senate Bill 1042 would support Pennsylvanians who graduated with significant student loan debt by creating the Student Loan Retirement Agreement Program, which would allow borrowers to repay onerous student loans through the use of Income Share Agreements (ISAs).

Under an ISA, a participant would agree to pay a fixed share of their income for a set period of time in order to pay off their student loan debt. Applicants must have completed their degree and begun responsibly meeting their current student loan obligations, among other requirements, in order to be eligible for the program.

Initial funding for the program would come from a revolving line of credit using funds already managed by the Pennsylvania treasurer. The program would not be funded by state tax revenues or new debt that must be repaid in the state budget. The program would be administered by the Pennsylvania Higher Education Assistance Agency (PHEAA).

Senate Bill 1043 would apply a similar concept to current students by establishing the Higher Education Income Share Financing Pilot Program, also administered by PHEAA. This program would allow current students to enter into a contract with their college or university where they agree to pay a fixed percentage or "share" of their future income for a set period of time in exchange for having all or a portion of the cost of their education paid for.

Both bills have been referred to the Education Committee for consideration.