You Can Securitize People Now

“What if people could sell stock in themselves? Instead of borrowing money and pay back a fixed amount, why not take an advance in exchange for a fixed percentage of your future income?” I have always thought of this as the great late-night dorm-room question of financial capitalism, and in fact I wrote a very late-night-dorm-room sort of paper about it in law school. It is increasingly, though, a thing.1 Income-based repayment is a standard option for federal student loans now. Income-sharing agreements are common enough now that they are regularly abbreviated as “ISAs,” and they have become a popular way to finance coding-school tuition. That makes sense. So much of Silicon Valley has a flavor of dorm-room capitalism anyway, so teaching people to code in exchange for equity in the people just feels natural.

Once you start down the path of “what if people sold stock in themselves,” you might as well move on to “what if we securitized people?” What if people’s future incomes were bundled together, cut into tranches, and sold to investors? Well sure why not; here is Bloomberg’s Claire Boston about a sale of ISAs from Lambda School (a coding school) through Edly (an ISA investing platform):