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