Like most college students today, Parisa Baharian relies heavily on financial aid to cover her costs at the University of California, San Diego. So when the school ran out of federally subsidized loans last fall, the political science major sought out alternative sources.

Ms. Baharian rejected the idea of taking out a bank loan, and decided she was too busy for a part-time job. "Credit-card debt is the most scary of all," she says, rounding off the list of nixed possibilities.

She finally settled on a new type of aid program that gives new meaning to the axiom: "College is a good investment."

Instead of a loan, the college senior secured a $2,500 "human capital investment" from the nonprofit Robertson Education Empowerment Foundation (REEF), founded by UCSD alumni and Internet entrepreneur Michael Robertson.

In return, Baharian agreed to pay 0.76 percent of her salary to REEF for the next 15 years - even if that figure turns out to be vastly more than she received.

Baharian, who plans to be a lawyer, estimates she will pay back about $5,000 instead of the initial investment of $2,500.

"Would I recommend this in place of funding that the school gives you? I would say no," she says. "But when it comes to banks and credit-card debt, this is a good way to go. I've basically avoided credit-card debt by going through REEF."

Baharian also says she agreed to the deal because REEF will reinvest her payments to provide scholarships for other needy UCSD students. "I wouldn't have done it otherwise," she says.

While some critics have described the contracts as a type of indentured servitude for students, others say the financing model is a better alternative to the huge debt loads that most students carry with them after school.

Under the REEF program - which was modeled on the New York for-profit investment firm MyRichUncle that launched in 2001 - students can receive up to $7,000 a year for which they pay a fixed rate of between 0.2 percent to 4 percent of their future earnings over a set period of time. The interest-free repayments rise or fall depending on the person's salary. At the end of contract, the obligation is over, regardless of whether the final total is more or less than the original investment.

Most loans don't take into account a person's economic situation at any given time, says MyRichUncle co-founder Raza Khan. The fixed repayment rates, by contrast, always reflect a borrower's ability to pay, dramatically reducing the risk of default, he says. And if a borrower falls below the poverty level, arrangements to suspend payments for a period of time can be made.

Many students now leave college with huge debts, Mr. Khan explains, including about $7,500 on credit cards that charge 22 percent interest. "When students first leave school, that debt is actually a very high percentage of their income," says Mr. Khan, whose web-based firm matches investors ("rich uncles") with needy students.

"It's only toward the end of the repayment schedule that the debt becomes a smaller and smaller percentage of the gross income," Khan continues. "Whereas, we remain the same percent of income throughout the life of the agreement."

Repayment rates mirror those of REEF. They are determined by a number of factors, including a student's age, academic major, test scores, former work experience, and income-growth potential.

But one financial-aid expert says plenty of less expensive alternatives exist.

"Borrowers who use that service will be worse off than if they just got a traditional student loan, or even a private student loan," says Kenneth Redd, director of research and policy analysis for the National Association of Student Financial Aid Administrators.

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