The discussion addressed the fact that ISAs have generated a good deal of excitement because they could represent a student-friendly form of financing postsecondary and nontraditional education programs, but there are questions about them because they are so new and are still largely unregulated.

Noting that ISAs are powerful tools that could either be enormously helpful or very dangerous, Pollack said it’s important for ISA providers to abide by the Truth in Lending Act as closely as possible and offer clear terms and disclosures so students who choose to use them know what they’re signing up for.

“Students should also not bear most of the risk. The promise of ISA is that the risk is being shifted from the student onto the providers, either the schools, the third-party providers, or investors,” he said, “and the design of the ISA and operation of the ISA should be consistent with that promise.”