What Is An Income Share Agreement

You promise to pay the ISA provider a fixed percentage of your income for a period of time depending on the school`s purpose. Income participation agreements are not accepted by all higher education institutions and universities. De Purdue University offers a program of agreement for limited income. Since its inception, Purdue has awarded more than 1,200 financing contracts in more than 150 majors. They finance the training of a student or part of it and are reimbursed after graduation and after employment by fixed payments at a fixed rate. The University of Utah offers revenue participation agreements for selected majors. Your estimated total expenses are usually the determining factor when considering an ISA. Think about your career. What is the average salary and what is the typical course of the career? Those studying it, engineering or other high-income majors can ultimately spend more with an ISA.

However, it might be your best bet if your only other option is a high-rate private student loan. However, ISA proponents argue that students are not „stuck“ because students have no legal obligation to work in a particular sector and, since it is illegal for investors to push them into a particular career, students are no more „stuck“ than those with student loans. In fact, someone with a traditional student loan has less choice than someone with an ISA, because the student must be with a loan in a career where he earns at least enough income to cover his monthly payment, while someone with an ISA can choose to never earn money and not owe the investor a penny. [3] [11] Carlo Salerno, vice-president of research at Campus Logic, said that neither approach to revenue participation agreements is intended to fully address the problem of increased funding. (Salerno previously launched a platform that allowed students to market directly to investors for financial support and was a former supporter of the income participation model. CampusLogic announced a partnership with Vemo in June.) Suppose your ISA requires you to pay 5% of your post-degree income over a 10-year repayment period. If your salary started at $52,000 and increased by 4% each year at age 10, you first paid $217 per month and a total of $31,216.