The cost of getting a college or university degree continues to feel out of reach for many students. Parents are even wondering if the cost is worth the return on the investment. In fact, obtaining a college degree has put many parents and students under a great financial burden.
As a result, many schools and institutes are looking for new and better ways to finance higher education. ISA is one winning method that’s been drawing the attention of investors and education providers alike.
What is ISA
An income share agreement (ISA) is a financial structure that allows an individual (usually college university students) to fund their education without paying for tuition upfront until they get employed.
ISA funds a student’s education while the student repays through a fixed percentage of their income after they graduate and land a job. Shortly put, an Income Sharing Agreement enables a student to get educated without paying anything upfront.
However, the ISA funding program is not confined to pursuing a college or university degree. Some online learning institutes also employ Income Share Agreements as a way to finance individuals seeking non-academic careers such as Cybersecurity, data science, and data analytics.
How ISA works
An Income Share Agreement is an alternate way of financing higher education. Usually, an investor will transfer funds to an individual (to finance their educational opportunities) in exchange for a fixed percentage of future income.
Unlike the traditional student loan system, ISA is considered to be less financially risky as students will not repay when they don’t get employed or meet the preset threshold (set by the investor) or can't get a job. Specifically, there’s a minimum salary an ISA beneficiary should earn per annum before commencing repayment. On the other hand, the debt will be waivered if the grad is unemployed.
However, it’s important to note that the ISA market is largely unregulated, and programs do vary by institutions; therefore, the repayment percentage and period differs.
Usually, the timeframe can span across a couple of years, while ISA repayments can vary from 2% to 17%, depending on the course of study. For example, engineering or medical majors tend to pay a small percentage of their income for a short time, while fine arts or literature students might pay more.
Institutes providing ISA
Some private institutions and schools are offering the ISA program. Though all programs revolve around the same model, there are several variations ineligibility, interest rate, and payment period.
Below are a couple of institutions (universities, colleges, and private firms inclusive) that offer Income Sharing Agreement.
The cost of getting a college or university degree continues to feel out of reach for many students. Parents are even wondering if the cost is worth the return on the investment. In fact, obtaining a college degree has put many parents and students under a great financial burden.
As a result, many schools and institutes are looking for new and better ways to finance higher education. ISA is one winning method that’s been drawing the attention of investors and education providers alike.
What is ISA
An income share agreement (ISA) is a financial structure that allows an individual (usually college university students) to fund their education without paying for tuition upfront until they get employed.
ISA funds a student’s education while the student repays through a fixed percentage of their income after they graduate and land a job. Shortly put, an Income Sharing Agreement enables a student to get educated without paying anything upfront.
However, the ISA funding program is not confined to pursuing a college or university degree. Some online learning institutes also employ Income Share Agreements as a way to finance individuals seeking non-academic careers such as Cybersecurity, data science, and data analytics.
How ISA works
An Income Share Agreement is an alternate way of financing higher education. Usually, an investor will transfer funds to an individual (to finance their educational opportunities) in exchange for a fixed percentage of future income.
Unlike the traditional student loan system, ISA is considered to be less financially risky as students will not repay when they don’t get employed or meet the preset threshold (set by the investor) or can't get a job. Specifically, there’s a minimum salary an ISA beneficiary should earn per annum before commencing repayment. On the other hand, the debt will be waivered if the grad is unemployed.
However, it’s important to note that the ISA market is largely unregulated, and programs do vary by institutions; therefore, the repayment percentage and period differs.
Usually, the timeframe can span across a couple of years, while ISA repayments can vary from 2% to 17%, depending on the course of study. For example, engineering or medical majors tend to pay a small percentage of their income for a short time, while fine arts or literature students might pay more.
Institutes providing ISA
Some private institutions and schools are offering the ISA program. Though all programs revolve around the same model, there are several variations ineligibility, interest rate, and payment period.
Below are a couple of institutions (universities, colleges, and private firms inclusive) that offer Income Sharing Agreement.
University of Utah
The University of Utah launched a five-year pilot ISA program (called Invest U) to encourage students leaving school for work to finish their education. Eligible students should be within 32 credit hours of graduation as well as pursuing a degree in engineering, education, computer science, or other selected majors.
Duration of payment varies between 3 to 10.5 years, and the ISA beneficiary must be earning a minimum of $20,000 before commencing repayment.
Messiah College
Messiah College, a private college in Mechanicsburg, Pennsylvania, started an Income Sharing Agreement program in 2018, whereby all majors in all years are eligible. Beneficiaries are required to repay within 84 months or 168 months (14 years) if the student leaves the workforce or makes below $25,000.
QuickStart
QuickStart is an institute offering ISA funding for its bootcamps for tech careers such as Cybersecurity, web development, data science, and data analytics. Lectures are flexible and facilitated online. Students can work through the lectures at their own time and pace.
Grads start to repay13% of their salary once they begin to earn at least $50,000 per year, and repayment span across two year
Why the QuickStart program is better
- source: LumniAll QuickStart online IT courses are financed through the Income Share Agreement (ISA).
- Courses include Cybersecurity, web development, data science, and data analytics, which are self-paced, meaning students can work through the course at their convenience.
- Up to 28 weeks (7 months) of job-oriented and intense learning that prepares students for the workplace. These training are built around speed and high-impact learning, which makes it very useful for individuals seeking a non-academic career.
- QuickStart allows students' interaction with industry and academic experts. Also, students get the opportunity to be interviewed by ex-employees of companies such as Google and Facebook.
- QuickStartgrads can pay the remaining tuition once they start earning at least $50,000 monthly at an interest rate of 13% per annum
Success stories around the ISA Program
There have been many success stories around ISA as it provides an easy way to pursue a college or university degree as well as non-academic skill acquisition without paying tuition upfront. Besides, the repayment can be made for a fixed period.
Recently, ISA is getting the attention of venture capitalists. The VC funding was led by Geoff Lewis of Bedrock Capital, aside from GGV Capital, Google Ventures, Vy Capital, Y Combinator, and Sound Ventures.
Going into the future, many more private institutions, philanthropists, and other private firms will invest in Income Sharing Agreement (ISA) as a way to fund not only higher institution education but also non-academics skills acquisition.