The Vision
The Intellectual Heritage of Education Finance
Grounded in Nobel-laureate economic theory. Engineered for the 21st-century digital economy.
01 — The Problem
The Problem with Fixed Money Loans
In 1955, economist Milton Friedman published a seminal analysis fundamentally questioning how society finances human development. Friedman identified a critical market failure: investing in human beings cannot be financed on the same terms or with the same ease as investing in physical capital.
When a financial institution funds a physical asset, such as a commercial building, it holds collateral. If the venture fails, the asset can be liquidated. When an institution finances a human being's education, it holds no such security.
1955
Milton Friedman's Seminal Analysis
To compensate for this inherent risk, traditional education debt mechanisms have evolved into rigid, fixed-rate instruments. This system forces the individual to bear the entirety of the financial risk, regardless of whether the education provided a tangible economic return.
This structural flaw is the direct catalyst for the modern student debt crisis, incentivizing the accumulation of degrees that fail to yield economic productivity and stifling individual financial mobility.
02 — The Alternative
Equity Investment in Human Capital
Friedman proposed an elegant, market-driven alternative: “equity investment in human beings”. Instead of issuing fixed money loans, investors could advance funds for education on the condition that the student agrees to pay a specified, manageable fraction of their future earnings.
This instrument—the theoretical foundation of the Income-Share Agreement (ISA)—perfectly aligns the incentives of the investor with the success of the student. If the student prospers and achieves high earning capacity, the investor realizes a proportionate return. If the student faces economic hardship, their financial burden is contractually mitigated. In this paradigm, the broader market possesses a direct, financial interest in ensuring students receive a superior, highly relevant education and successfully enter the workforce.
03 — The Breakthrough
Solving the Scalability Challenge
If the equity model is economically superior, why did it not replace traditional student loans decades ago? Friedman himself identified the primary barrier: the prohibitive administrative costs of managing individual contracts and the friction of illiquid markets.
A single ISA is an isolated, illiquid agreement, making it exceedingly difficult for institutional capital to participate at scale. Furthermore, evaluating individuals on a one-to-one basis introduces significant risks of bias and cream-skimming.
SchoolShare Capital, Inc. was founded to solve this exact structural deficiency. The vision is not to fund individual students in isolation, but to securitize ISAs across aggregate cohorts—such as the entire incoming class of 20XX at a specific public school district.
Diversified Instruments
Pooling an entire demographic class creates a naturally diversified, securitized financial instrument.
Eliminates Discrimination
Aggregate-based approach eliminates individual discrimination while guaranteeing broad-based educational funding.
Scalable Asset Class
Provides institutional investors with a scalable, liquid, and predictable asset class.
The theory was born in 1955; the technological infrastructure to execute it at scale is being built today.
Next Steps
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