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Top 6 Reasons Income Share Agreements Are Better Than Loans.

Dave Edwards May 17, 2019

6 Reasons Income Share Agreements (ISAs) Are Better Than Loans.

Because earning an advanced degree should not be a risky proposition, Meratas provides merit-worthy graduate students with educational financing that is safer and more flexible than private loans. The grants we provide are risk-free, and you only need to repay the financing after graduation if your degree leads to career success.

The money we provide is not a loan. Instead, we provide funding using Income Share Agreements (ISA), with additional enhancements designed with your success in mind. We call this Merit Financing, and it’s a great way to supplement your existing government subsidized loans without incurring any additional debt. 

Qualified applicants will receive up to $15,000 that they can use towards tuition, textbooks, or living expenses while earning your degree or transitioning into the workforce. In exchange, you agree to pay back a small percentage of your future earnings, but only when you’re gainfully employed and earning above a set minimum income. With Merit Financing, if your degree does not lead to career success and financial stability, we will lower or waive your payback obligations.

# 1: No Co-Signer Needed

We believe that access to higher education should be based on your merit and future potential, not on your parents’ respective educational attainment or their ability to guarantee your loans. Many of our clients represent the first generation in their family to graduate from higher education. We see this as a merit-worthy achievement to be proud of, not a financial burden to shoulder.

# 2: Credit History Not Determinative

We know that you are more than a credit score, and your personal achievements are an important indicator of the success you will enjoy in the future. That’s why we review your academic experience, the intended career you are pursuing, work history and even military experience to build a holistic merit profile for you.  We call this your merit score.

# 3: Automatic Payment Suspension.  Guaranteed.

If your education does not lead to higher earnings, if you lose your job, or you otherwise become unable to work, we will automatically waive your payments. There are no complicated forms or hardship requests to complete. With Merit Financing, you get true payment protection. In fact, we guarantee it. This is like having an insurance policy for your education!

# 4: No Interest Rate, and No Principal Balance to Repay

With Merit Financing, the money we provide you is not a loan.  There is no accruing interest, no principal amount that you must repay, and no penalty if the amount you ultimately pay back under your contract is less than the amount you received.  With Merit Financing, you can focus on finishing your degree without the added distraction of debt.

# 5: Industry leading Early Payment Rewards

If you achieve financial success in your career, you may terminate your Merit Financing early for significant savings. We are the only ISA provider to offer incremental payment caps that start at 56% lower than the comparable industry rate for the same time period.  

Even if you have a job lined up for after graduation, or plan to become a high earner, you will still never pay back more than what is fair. The payment caps act as a “ceiling” on your payback obligations, so for expected high earners, having a fair and reasonable payment caps is vital. With payment caps starting as low as 1.1x (i.e., 1.1 times the funded amount), Merit Financing is an excellent option for those about to earn their degree and looking for help to transition from school to the workforce.

#6: Alignment of Interests

Unlike loans which you must repay regardless of your financial circumstances, Merit Financing is only paid back when and if you become successful. As such, our interests are aligned with yours.  We provide our grant recipients with networking opportunities, career mentoring and job placement advice. In fact, should you end up in a low paying job after graduation, we assume the risk that the amount you pay back may be less than the amount we funded you.

If you believe you are a good candidate for Merit Financing, we encourage you to apply.  We are constantly evaluating new programs, and even if we do not currently offer Merit Financing for your specific degree or career path, we may do so soon.

Topics: income share agreements, ISA, loans

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