Financing college with equity?
August 22nd, 2006 by 
Chris Harris
Check out Ron Steen selling 2% of his future earnings for a debt-free college experience! The man started the bidding at $100,000, which implies that he believes his future income stream is worth at least $5MM over his 40 working years!
So is this a good idea?In the 2005-2006 school year, the College Board’s 2005 tuition report found that at four-year private nonprofit institutions, college cost students $29,026. Four year public institutions cost just 42% of that, coming in at: $12,127. They also found that the rates of increase were slowing to about 6% annual increases. They also found that the trends in student aid favored higher income people.With the amount of student aid ballooning in 2005-2006 to $129BB - I find it hard to believe that he couldn’t have financed part of his education through debt.
Therefore, I think the best idea would be to agree to his equity terms, and then “refinance” the equity by having Ryan take on a student loan - but then agree to guarantee the loan for him. This would get the equity holder most of his money back, at an interest rate totally out of reach for him, and Ryan would get to go to college debt free!
Posted in Bootstrapping, Entrepreneurial | 