The Ultimate Guide to Income Share Agreements
The world of financial aid is full of acronyms–FAFSA, CSS, EFC, etc. We are here to talk about another acronym–ISA, which stands for Income Share Agreement. Income Share Agreements are one of the newest and most innovative ways to finance your education. In The Ultimate Guide to Income Share Agreements we are going to talk about what ISAs are, how you can take advantage of them, and some of the institutions that are currently offering them. Let’s dive in…
What are Income Share Agreements?
Income Share Agreements are a higher education financing model that actually dates back to the 1950s. However, they are gaining popularity now as student debt continues to explode. The basic idea of the ISA is simple: instead of paying tuition or taking out loans, students are promising to pay back a future percentage of their salary.
What does this mean for me as a student?
The best part of the ISA is that you are not responsible for up-front tuition costs (some ISAs also cover other expenses such as room, board, and even other living expenses). Because ISAs flip the education financing model (you are essentially being paid, as opposed to paying the school), the school has a vested interest in recouping their investment. This means that they will be very motivated to help you find a good, well-paying job after college. We are a fan of the ISA model because it puts the onus on the institution to help you connect with post-graduate employment opportunities.
What happens if I don’t find a job? How will I pay back the ISA?
That’s a good question. Most ISAs will have a minimum salary that you have to hit before you are responsible for repayment (something like $50,000 or so). If you are not making that amount of money, you will not be responsible for paying back a percentage of your salary. However, every Income Share Agreement is going to be different, so we always recommend reviewing the fine-print.
What if I make a lot of money coming out of college? Is it possible to “overpay” for the ISA?
Most of the ISA programs have a cap, so it is possible to pay off your obligation early. This means that if you get a really high paying job out of colleges, you will not be penalized for simply making too much money. ISA
What schools are offering Income Share Agreements?
Though the concept of an ISA is not new, they are gaining in popularity. Below are some of the schools that currently offer an Income Share Agreement to students. We are going to continue to add to this list, so be sure to check back for more schools:
Lambda School is an online coding school that we recently profiled on Scholarships360. Because Lamba’s curriculum is delivered online, students can live anywhere in the world. Lambda School has partnerships with top companies like IBM and Slack.
Lambda School takes 9 months to complete and has multiple tracks so students can specialize in everything including iOS or Android Development, Data Science, Full Stack Web Development, and UX Design.
Holberton School offers project-based courses in everything from Web Development to Virtual Reality to Machine Learning. Holberton has campuses in San Francisco, CA, New Haven, CT, and Columbia. Holberton School alumni have been hired at top companies like Tesla, Facebook, Google, and Pinterest.
Make School is unique because students who graduate will also receive their Bachelor’s Degree! Because of this, students will also receive a strong liberal arts education to complement their technical training.
Purdue University in West Lafayette, IN has an Income Share Agreement program called “Back A Boiler.” The Purdue ISA is a little bit different than others because it is not currently meant to pay 100% of the university’s cost of attendance. Instead, the Income Share Agreement is intended to replace student loans in a student’s financial aid package.