How a small Colorado college is helping its undocumented students pay for school

Colorado Mountain College started using income share agreements a year ago and now the fund has grown tenfold.

Gabby Cerros reviews her notes in the student lounge on Colorado Mountain College’s Rifle campus on September 19, 2019. Cerros, a student in CMC's medical assistant program and a DACA recipient, is using an income share agreement from the school’s Fund Sueños program to help finance her education. (Photo courtesy of Colorado Mountain College)

About five years ago, the administration of Colorado Mountain College, one of the state’s smaller colleges, decided to try to boost its enrollment of full-time students by offering $1,000 scholarships to new high school graduates in the region.

CMC, based in Glenwood Springs, has 11 campuses in central and western Colorado and most of its 18,000 students are earning their associate degrees. Given that its territory includes mountain resort and agricultural towns where many workers are immigrants, administrators knew some of the students they were hoping to recruit would not be legal residents. That meant they weren’t eligible for state and federal aid and that often meant either they weren’t planning to go to college or they were enrolling but needed more time to graduate, taking a class here and a class there as they could afford. The longer they took, the greater the likelihood of never finishing school. 

“We’ve always known that this particular population of students was uniquely challenged” when it came to paying for higher education, says Matt Gianneschi, CMC’s chief operating officer. He estimates that 5% of CMC’s students are recipients of the Obama-era Deferred Action for Childhood Arrival (DACA) program. Under DACA, these students, whose parents brought them to the U.S. illegally as children, do not have permanent legal status, but they do have temporary protection from deportation and permission to work and study here.

But just how challenged was unclear, Gianneschi says. And then, with the announcement of the President’s Scholarship, CMC started getting calls from high school counselors. 

“We started getting notes of gratitude and lots of really excited high school counselors reaching out to us,” he recalls. “But what we didn’t anticipate was that we also started hearing from the same counselors saying, ‘Well, what do we do if the students aren’t allowed to apply for financial aid?’” 

The counselors wanted to know if their DACA and undocumented kids were still eligible for the $1,000 scholarships. The answer was no.  

The “no” didn’t last long. The demand was there. CMC changed its rules. 

But, Gianneschi said he kept thinking there had to be another solution. CMC educates the teachers, nurses, firefighters, hospitality workers and other segments of the labor force of Colorado’s mountain communities, he says. Supplying that workforce is the school’s goal. “These are remote places and so every single new worker in our communities makes a big difference,” he says.

In fact, the annual average economic contribution of a working DACA recipient is $109,000, according to American Action Forum. 

“We wanted to put another puzzle piece on the table to try to help this particular piece of the population,” Gianneschi says.

And he found one.

A different kind of loan

Gianneschi says he was at a conference in the summer of 2018 when he first heard about income share agreements (ISAs), a type of interest-free loan. Students agree to repay them with a percentage of their income for a fixed amount of time after they leave college. ISAs are still uncommon — CMC is the only school in Colorado with such a loan —  and they’re not without controversy.  

Critics argue that ISAs are simply another way to avoid dealing with the real problem: college costs too much. A student with an ISA leaves college in debt just as a student with a federal student loan might. Others are concerned with how repayment terms might be structured and whether they may prove unduly burdensome. Even if repayment percentages are set at a flat percentage of income, the more income grows, the bigger the payment becomes. Some agreements require payments for a set period of time — even if the loan amount has been repaid. That means some students end up paying more — sometime far more — than what they borrowed. Congress has been debating on and off about oversight of such loans, with Sen. Elizabeth Warren among the lead skeptics.  

CMC sought to circumvent some of these issues by setting its loans at a maximum of $3,000 a year, which more than covers annual tuition, plus books and fees for most of its students. Given that most students attend CMC for two years, the max loan would be $6,000. The college locks in repayment at 4% of the borrower’s earned income once that income surpasses $30,000 a year. The repayment period is five years or until the loan is paid off, whichever comes first. So no student pays more than what he or she borrowed. All repayments are to go back into the school’s foundation, which in turn, will replenish the ISA fund.  

Fund Sueños, the Dream Fund, started a little more than a year ago with $50,000 from two anonymous donors. A year in, Gianneschi says, it is being used to help 11 students so far, none of whom have yet graduated. 

One of those students is Gabby Cerros, who took out a $1,200 loan under Fund Sueños this past spring. 

The 20-year-old is a DACA recipient and student in CMC’s medical assistant program. When she began college, she said she could only afford to take two or three classes a semester. However, the financial assistance she’s receiving has enabled her to enroll full time. She estimates she’ll complete her associate degree and be in the workforce a year and a half sooner than she would have if she had remained a part-time student. 

“I would have probably taken, like, three and a half years,” Cerros says. 

She says she hopes that the training she’s receiving in college will be just the first step in a long career in medicine. “Anything in the medical field excites me,” she says.

In addition to attending school full time, Cerros continues to work full time at her current job as a hotel desk clerk. But now that Fund Sueños is covering her tuition, she says she can pay off her credit cards, help her mother with some bills and even save a little.  

Cerros says her financial agreement with CMC doesn’t stress her out because she’s not incurring interest on her debt. She’s confident that she’ll be able to repay her obligation and especially likes the idea that her future loan repayments go back into the fund to help other students. 

“It basically depends on us — if other kids can use the money — because if we don’t pay it back then they won’t have enough to cover the other students,” Cerros says. 

The pay-it-forward concept wasn’t a core consideration in the design of the program, Gianneschi says, but it’s turned out to be a feature that really matters to students.

Means to an end

Colorado has about 15,750 DACA recipients, according to the Migration Policy Institute. For years, state lawmakers tried and failed to pass legislation that would allow students who had grown up in Colorado but who were not legal residents of the U.S. to qualify for in-state tuition. That legislation eventually passed in 2013, a year after DACA was implemented by the Obama administration. This year, the legislature passed and the governor signed a bill that expands state financial aid eligibility to further help such students. 

Luis Colón, a member of the Colorado Commission on Higher Education, puts Colorado Mountain College’s Fund Sueños in the same category as in-state tuition and expanded access to state financial aid: tools that help Colorado resident students get into and graduate from college. 

“If this kind of legislation and this kind of program gives people a chance to really change the course of their lives, then why not? If they can contribute to our economic growth, then why not?” he says.

Colón acknowledges, however, that income share agreements could be difficult to run at other institutions. The low cost of tuition — $1,920 for two 12-credit semesters — is what makes it feasible for Colorado Mountain College students, he points out. 

Gianneschi says he regularly gets calls from other institutions — one as close as Denver, some as far away as Australia — that seem interested in starting an ISA program. However, none have to his knowledge. 

But someone is interested in seeing that CMC’s fund succeeds. This month, an anonymous donor contributed $500,000 to it — enough to offer loans for perhaps another decade, Gianneschi says. The donation, says Kristin Heath Colon, CEO of the CMC Foundation, “is a game-changer for students.”