Simplifying ISAs

What is an ISA?

An Income Share Agreement (ISA) is a contract between a student and their school, skills training program or lender, where in exchange for educational financing, the student agrees to share a fixed percentage of their post-graduation, pre-tax earnings over a set period of time.

  • More Flexible

    Since the amount repaid is tied to income, payments will always remain manageable despite any unforeseen changes to your earnings.

    ISAs include a “Floor” and “Cap”. Repayments are suspended when earning less than the Floor, and total payments will never exceed the Cap.

  • ISAs are NOT Loans.

    The money advanced is not a loan. It is an investment in the student’s future earning potential.

    There is no accruing interest, no principal balance, and no penalty if the amount ultimately repaid is less than the amount funded.

  • Aligned Incentives

    ISAs help reduce financial barriers to education and align incentives between school, student and funder.

ISA Key Terms

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Funded Amount

The amount funded on the student’s behalf.

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Income Share

The percentage of monthly, pre-tax income repaid after graduation (subject to the Floor and Cap).

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Annual Income

The student’s post-graduation, pre-tax income. 

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Monthly Payment

The dollar amount repaid by the student on a monthly basis. 

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Minimum Threshold

or Payment Floor. Repayment obligations are suspended when Annual Income is less than the Floor.

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Payment Cap

The “Ceiling”. One way an ISA is satisfied is if total, aggregate payments reach the Payment Cap.

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Required Payments

The number of required  Monthly Payments (subject to the Floor, but never to exceed the Payment Window).

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Payment Window

The outer limit on re-payment obligations.

When do ISA payment obligations end?

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Complete your Required Monthly Payments

This is the most common way to satisfy your ISA.

Each month, pay a percent of your gross monthly income. This counts as one Required Payment.

Your ISA will tell you how many payments are required. Once you pay them all - it’s done. (Even if you don’t hit your Max Payment Cap!)

Learn more

Payment Cap

Pay the Max Payment Cap

The next way to satisfy your ISA is by paying the Max Payment Cap.

This is built into your ISA and is the most you’ll ever need to pay towards your ISA.

It is a built-in protection for high earners so that they are not punished for earning more than expected. Once you hit your Max Payment Cap, your ISA is also satisfied!

Though it can seem like it, a Payment Cap is not the same as a principal in traditional loans. It is not necessarily a goal to pay this amount back (though you certainly can if you want to end your ISA early!). 

It really is first and foremost, a protection put in place to keep high earners from paying too much on their ISA but there are a number of other ways to satisfy an ISA.

Learn more

Reach the Payment Window

Reaching the End of the Payment Window

Every ISA has a set time period to collect your Required Payments or Max Payment Cap, known as the Payment Window.

No matter what is collected, once you have reached the end of your Payment Window, your ISA is satisfied.

This is a protection built into your ISA to help you in case you’re without an income for an extended period of time.

Learn more

How it Works

  • Apply

    Students apply for their ISA through the Meratas portal with one of our amazing partner programs. 

  • Go Through your Program

    Once approved, you will go through your educational program. Some programs will require some payments to be made up front. However, many offer their courses at no upfront cost under an ISA and only require payments once you receive a job.

  • Graduate and Get a Job

    Once you graduate your program, under some ISAs, you may not owe any payments until you are earning above a specified, pre-tax income (otherwise known as the Minimum Income Threshold). Many of our partner programs offer career assistance to help you succeed in kick-starting your future.

  • Begin ISA Payments

    Once you land a job and are making above the Minimum Income Threshold, you will begin paying back your ISA. Payments are monthly and are calculated by a percentage of your gross monthly income as outlined in your specific ISA (these terms vary from ISA to ISA, please consult your specific program's ISA). There are a certain number of these payments that must be made in order to satisfy your ISA (this is known as the Required Payments in an ISA).  

  • Your ISA is Satisfied!

    You can satisfy your ISA in one of three ways: 

    Make the required number of monthly payments.

    Your total payment amount reaches the Payment Cap.

    Your Payment Window elapses.