One day in 2017, Lauren Neuwirth sank into a chair in her university’s financial aid office feeling out of options. She was finishing her second year at Purdue University in Indiana, a school she’d chosen for its top-ranked engineering program. Neuwirth, who grew up near Milwaukee, was working two jobs to cover her living expenses and quickly running through the money her mother had set aside for college. Federal student loans only covered some of Purdue’s pricey out-of-state tuition. She worried that to remain in school she’d have to take out expensive private loans or join the Army.

But then Purdue offered her another way to pay. Investors—including wealthy alumni, a hedge fund, and the Purdue Research Foundation—would front her $50,000 to cover two years of college. In exchange, she’d owe them 14.8 percent of whatever income she earned in the eight years after she graduated. Neuwirth agreed. Last fall, her fifth and final year as a double major in food science and biological engineering, she received a job offer from the agribusiness Cargill at a salary of $56,000. If all goes as planned, she’ll eventually return a healthy profit for those investors.

“It has afforded me the opportunity to stay at Purdue,” said Neuwirth, 22, who spent last summer as a Cargill intern tinkering with the corn-flour mixture that coats McDonald’s Chicken McNuggets. “But it’s tricky,” she said, “because I’m going to have that pulled from my income, and then I’m also going to have to be paying off those federal loans. That makes me a little uneasy.”

This kind of arrangement, known as an income share agreement, or ISA, has been used in a smattering of places, but hasn’t gained much traction in the US—until recently. Now more than five dozen US universities and coding schools use ISAs, and in December the Department of Education said it would experiment with offering them. Senators have introduced bipartisan legislation to regulate the tools, and investors are taking notice.

As ISAs migrate from the margins of financial aid to the mainstream, the debate around them grows louder. Proponents tout the safety net they offer: With ISAs, unlike with loans, graduates pay nothing if they can find only low-wage work, and there are often limits on ISAs’ duration and on the total amount graduates must repay. “It makes college less risky,” said Beth Akers, a senior fellow at the Manhattan Institute, a conservative think tank.

The tool could produce other benefits: Investing directly in ISAs, as Purdue has done, gives schools a financial incentive to help their students through to graduation and into good jobs.

“It has afforded me the opportunity to stay at Purdue.” Lauren Neuwirth, Purdue student

But critics of ISAs argue that they are just a new spin on debt. Some contract terms are less rosy than they first appear: Most graduates will likely end up paying far more than they receive (Purdue’s cap is 2.31 times the size of the initial payment), and under some contracts the repayment period is extended if students earn too little. Uncertainties abound, such as what happens if graduates have difficulty making payments. Education experts worry that investors gambling on students’ futures could produce all kinds of ill effects, from discrimination against students who are expected to earn less to hastening the transformation of colleges from places of learning into engines of skilled workforce production. At Purdue, for example, students studying for degrees that usually lead to low-paying fields are saddled with the most burdensome repayment terms.

“My fear is that students, and particularly low-income, first-generation students, will end up paying more for their educations than they would have if they’d taken out traditional loans,” said Mark Becker, president of Georgia State University. “The reality is that investors are investing to make money; this is not an altruistic undertaking.”