The Ultimate Guide to Income Share Agreements
“College is an investment.”
Growing up, we hear this all the time from parents, teachers, guidance counselors, and friends. College requires a massive commitment of both time and money and in the end, you are not guaranteed any specific outcome. Income Share Agreements turn this around and make the college invest in you.
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, 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. Otherwise, the institution will not get paid back!
What happens if I don’t find a job? How will I pay back the ISA?
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
Are there any downsides to an Income Share Agreement?
It is important to remember that the Income Share Agreement is a legal, financial agreement that you are making with the institution. This means that you are responsible for reporting your income and paying back money according to the terms of your ISA. Overall though, we think that the Income Share Agreement is one of the best ways for students to finance their education!
What schools are offering Income Share Agreements?
Though the concept of an ISA is not new, they are gaining in popularity. Many of the “early adopters” of Income Share Agreements are 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:
The Flatiron School offers specializations in Data Science, Software Engineering, and UX/UI Design. Flatiron has campuses everywhere from London to Atlanta to Seattle. Students also have the option to complete their coursework online!
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 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.
Thinkful is a boot camp that focuses on 1:1 mentorship for all students. Every student in Thinkful is matched with a seasoned industry professional, which is a great way to learn! Thinkful allows students to focus on software engineering, product design, data science, and data analytics.