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Mar 10, 2017 10:33 AM EST

Purdue University, in partnership with technology firm Vemo Education, will be promoting an alternative form of college financing. The product is known as income-share agreement (ISA) and allows students to pay for their higher education by selling a part of their future income to a sponsor.

The university initially launched its first college-backed ISA for its students last year, Market Watch reported. President Mitch Daniels revealed that other schools reached out to the school and expressed their interest in offering the same program.

Income-share agreement (ISA) helps students pay for college by selling a percentage of their future income to a backer, instead of paying directly or borrowing from student loans. Usually, students who go into more profitable industries pay a smaller percentage while those who go into less lucrative fields pay a bigger share.

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Purdue University and Vemo Education's partnership was announced on Thursday. It is part of efforts to help other schools launch their ISA programs by allowing them to use Purdue's program as reference and Vemo's technology to easily provide students with what they need for the alternative college financing program.

In Purdue's official website, the university established its Back a Boiler - ISA Fund program to provide an alternative choice of funding options for students. It was established with the intention of reducing debt and financial risk for graduating students.

The institution clarified that it does not aim to replace federal aid but wants to provide another option to students who need additional resources or favor a more income-flexible funding alternative. The ISA would be treated similarly to a private loan.

One of its major benefits to students is that ISA payments can be adjusted according to their levels of income. It has a minimum income threshold and a maximum payment cap. This means that students who do not meet a minimum income level will not pay yet while those who earn a bigger amount of income will not be required to pay above a maximum amount.

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