What is an Income Share Agreement, and is an ISA Right For You?

Income Share Agreements, commonly referred to as ISAs, are a new Alternative to Student Loans, and the latest invention for funding higher education expenses.

Instead of taking out a huge loan that you end up owing interest on, Income Sharing Agreements let you avoid the problems associated with interest accumulation, as they are more like a contract than a loan.

Under an ISA contract, you are provided with funds to pay for college costs in exchange for a promise to pay back a percentage of your income after you’ve graduated.

This Guide will walk you through all the details of ISAs, explaining what they are, how they work, and how to determine if one is right for you!

After reviewing this Guide, if you have any other questions about Income Share Agreements, please leave them in the Comments section below and I’ll do my best to get you a quick response!

Why Should I Care About Income Sharing Agreements

In many ways, ISAs are less complicated than student loans, and potentially less risky than traditional student loans, since they don’t involve interest accumulation that could spiral rapidly out of control into overwhelming and inescapable debt.

In some cases, Income Share Agreements are also way less expensive than student loans, both in the short-term, and over the long-run of the loan or contracted period.

But that doesn’t mean that ISAs are right for everyone, as there are certainly downsides to Income Share Agreements as well.

To determine if an ISA would be right for you, it’s vital that you first fully understand how they work, what their pros and cons are, and how to calculate the potential costs of an ISA vs. the costs of a traditional student loan.

This Guide to Income Sharing Agreements will walk you through all of this and much, much more!

But For Those of You Already Buried in Student Debt…

For anyone already struggling to keep up with monthly student loan payments, please listen closely, because before I explain Income Sharing Agreements, I’d like to offer you one quick piece of advice.

If you're truly struggling with student debt, then you should also consider paying a Student Loan Debt Relief Agency for help. Why? Because the people working at these companies deal with student loans all day, every day, and they're your best chance at figuring out how to get your loans back under control.

I've interviewed all sorts of debt relief agencies over the past 10 years, talking to all sorts of so-called "experts", and I can tell you that in all honesty I've only found two companies I trust to offer actual financial relief to people struggling with student loans.

For help with FEDERAL Student Loans: Call the Student Loan Relief Helpline at 1-888-906-3065. They will review your case, evaluate your options for switching repayment plans, consolidating your loans, or pursuing forgiveness benefits, then set you up to get rid of the debt as quickly as possible.

For help with PRIVATE Student Loans: Call McCarthy Law PLC at 1-877-317-0455. They will negotiate with your lender to settle your private loans for much less than you owe, then get you a new loan for the much lower, settled amount. NOTE: McCarthy Law can ONLY help with Private student loans.

If you do decide to call one of these companies and you have a bad experience with either of them, PLEASE make sure to come back and let me know about it in the Comments!

How do Income Share Agreements Work?

First, to figure out if you may want to utilize an ISA, let’s make sure to explain all the stipulations involved in an Income Sharing Agreement.

There are a variety of different factors that make up the structure of an ISA, as different schools and companies are free to structure them however they like, within certain restrictions (I’ll cover those soon in the “Regulations” section below), but every ISA has a few common levers that determine how the contract will play out, and whether or not one would be right for you.

    Factors Determining Costs of an ISA

  • Funding Amount – The Funding Amount is the amount of money you’re able to get from the school or company paying for your higher education expenses
  • Earned Income – Earned Income refers to your total wages and self-employment income, the amount of money you’ll make after you graduate, and which your ISA Monthly payments will be calculated from
  • Percent of Monthly Income – This is the % of your Earned Income that you’ll be required to pay back to whoever you sign the ISA contract with, and it’s the biggest thing determining the costs of your ISA
  • Payment Term – The length of time, typically measured in either months or years, that you’ll be required to pay a portion of your Earned Income back to whoever you signed the ISA contract with
  • Payment Cap – Legitimate ISAs don’t leave the total amount you’ll be forced to pay open to interpretation, but limit the total amount you’ll need to pay back before satisfying your end of the contract
  • Eligibility – Different ISAs are eligible to different borrowers, at different schools, and especially with different majors. Some schools and companies will only sign ISAs with STEM majors, for example
  • Minimum Salary – Good ISA agreements will stipulate that you don’t have to pay anything until your income hits some set minimum amount, ensuring that you’re not making payments if you aren’t making enough money to live on
  • Method of Funding – Each ISA funds their contracts in different ways, some using trusts, grants, endowments and donations, while others utilize traditional investments, etc.
  • Other Factors – Things like maximum borrowing limits, application processes, customer service quality, etc., should also be taken into account for some borrowers, but most of the time, these won’t matter much

As you can see, there’s a pretty extensive list of potential differences between ISAs, meaning that you’ll need to spend some time researching your offers and evaluating which one is actually best for you.

The important thing to remember is that ISAs don’t all offer the same sorts of flexibility, or value, because there can be huge variances in long-term costs, so you’ll certainly want to compare different offers against each other before agreeing to any of those that you receive.

Pros & Cons of Income Share Agreements

Remember, Income Sharing Agreements are still relatively new, and grew out of the demand to find an alternative form of financing that could help prevent the potential disasters associated with bad student loans.

But that doesn’t mean that ISAs are right for everyone, or that every ISA is a good opportunity either, as some ISAs are much cheaper than others, and ISAs will work great for certain borrowers, but terribly for others.

Below I’ll detail a list of the major pros and cons associated with ISAs, which should give you a better idea about whether you’ll want to pursue an Income Share Agreement at all, or if it’d be a better idea for you to look into traditional student loans, scholarships and grants instead.

Benefits of Income Share Agreements

There are several benefits to Income Sharing Agreements, and especially for certain types of borrowers, or borrowers facing specific financial circumstances.

Here’s a short list of the reasons to consider an ISA instead of a traditional student loan:

    Pros of Income Share Agreements

  • ISAs Are More Straightforward – Student loans are a complicated and confusing type of loan, thanks to the potential for runaway interest accumulation, delinquencies and defaults, which can lead to huge additional costs in terms of unexpected fines, fees and penalties
  • ISAs Shift Some of the Financial Risk to the Lender – With student loans, you basically take on all the risk of the debt, as it’s yours pretty much for life, no matter how much you make or how well you do, whereas a fair ISA will limit your potential costs, and should be much easier to deal with if you end up having trouble finding solid employment after graduation
  • ISAs Won’t Bury You in Inescapable Debt – Unlike traditional student loans, which never come with a total repayment cap, ISA’s typically have a maximum payment amount, limiting your total financial liability and meaning that you’ll never end up owing way more than you ever imagined, or way more than you could possibly ever pay back
  • ISAs Are Currently Dischargeable via Bankruptcy – Unlike Student Loans, which are notoriously difficult to discharge by filing for Bankruptcy, it’s currently possible to wipe out an ISA by declaring bankruptcy, though Congress has tried to make that illegal several times in recent years
  • ISAs Compel Schools to Care – When you’ve taken an ISA from a school, it’s in their own interest to help you find a good job, making a good income, because if you can’t accomplish those goals, then you won’t be able to pay them back; this makes it far more likely that you’ll receive valuable support and opportunities after graduation
  • ISAs Should Save Taxpayer Funds – The current Federal Student Loan Debt system costs taxpayers money every time that someone defaults on their loans, and Federal funds must be spent chasing them down, pursuing legal action, paying a debt collection agency to attempt to get the money back, etc., whereas an ISA doesn’t have anything to do with Government funding
  • ISAs Offer Additional Flexibility – While there are certainly ways to restructure, renegotiate, or get out of paying back student loans, it’s not an easy process, so people who borrow large student loans, but don’t do well in life end up getting totally buried in debt; this is much less likely to happen with an ISA, since people who don’t make much after graduating will never be asked to pay much back

As I’ve detailed above, the biggest and most important advantages of ISAs compared to traditional student loans is that they’re far less likely to ruin your life, burying you in massive, inescapable debt.

Downsides of Income Share Agreements

But it’s not all sunshine and rainbows with ISAs, because there are some serious potential drawbacks to using an Income Sharing Agreement, especially for certain borrowers in different types of financial circumstances.

Here’s a short list of the reasons to avid an ISA, and stick to traditional student loans instead:

    Cons of Income Share Agreements

  • ISAs Could End Up Being More Expensive – In certain circumstances, for some borrowers, and especially high-earners, an ISA could end up costing much more than traditional student loans; it all depends on the conditions of the contract, how much you end up making, etc., so they have to be compared to student loans on a case by case basis
  • ISAs Are Still A New Thing – All sorts of unforeseen issues could arise with ISAs, as they’re still a relatively new thing that hasn’t been tested by a huge portion of the population; we may soon find out that they work great for some people, but terribly for others – nobody knows quite yet
  • ISAs Will Change the Nature of Education – If all schools went to ISAs exclusively, then you’d probably see a huge cut in the number of humanities and non-profit seeking programs and degrees on offer, because schools with skin in the game are going to prioritize money-making programs (where they’re likely to be paid back) over programs that don’t lead to stable or well-paid employment (like Social Workers, Writers, Arts and other “riskier” degrees)
  • ISAs Can Be Complicated and Difficult to Predict – Even though they seem more straightforward than a student loan, since costs can be better defined, the one huge variable with ISAs is that nobody knows how much they’re going to end up making after college, so it can be incredibly difficult to predict the actual costs you’ll face post-graduation, especially at any given time – while you may know your total financial liability with certainty, you won’t know when those payments will need to be made, or how much they’ll be, like you do with traditional student loans
  • ISAs Can’t Be Paid Off Early – You may be able to find an ISA offering enough flexibility in the repayment terms that it allows for early repayment without penalty, but in the current market, this is atypical of the Income Share Agreements on offer at most schools; typically, an ISA will require you to wait until the end of the contract, fulfilling the stipulated monthly payments, before you can get rid of it, which is something that restricts, rather than enhances, financial freedom
  • ISAs Can Lead to “Default” – Though they’re not traditional loans, it’s still possible to default on an ISA contract, which could lead to legal repercussions, including being sued for breech of contract; should this happen to you, the cost of your ISA could end up ballooning, as legal fees, fines, penalties and other additional payments may end up getting tacked on to your total costs, making that “cheap” ISA much more expensive than you had originally anticipated
  • ISAs Aren’t Yet Well Regulated – Federal and even Private Student Loans are already decently regulated, but ISAs are such a new thing that the rules haven’t quite yet been perfectly defined about how they can operate, so there are likely to be some bad actors out there offering low-value ISAs, maybe even programs that seem cheap, but end up being vastly more expensive than traditional student loans
  • ISAs Could Destroy Higher Education Altogether – Since the Federal Government guarantees that schools will recoup the costs of Federal Student Loans, they’re virtually risk-free, but if enough schools all began offering ISAs, and then weren’t able to collect on those contracts, they could be put out of business, making higher education much harder to access

Now that you’ve been introduced to the major pros and cons of Income Sharing Agreements, let’s look at some specific circumstances to compare ISAs vs. Traditional Student Loans.

Income Share Agreements vs. Traditional Student Loans

Some College Degrees and Careers lend themselves to being perfectly aligned with the benefits of Income Sharing Agreements, whereas others are obviously better fits for traditional student loans.

Unfortunately, unlike Federal Student Loans, which are standardized, well-regulated, and essentially agnostic to your field of study and eventual career, ISAs can be customized with different terms and requirements based on the school or companies expectation of your eventual level of success (read: ability to generate income and pay them back!).

You’ll need to take this factor into account when determining if an ISA or a traditional student loan makes the most sense for you, but to help you get a general idea of the sorts of people who are good fits for ISAs, here’s a quick breakdown of the sorts of Majors and Careers that work best for ISAs vs. Traditional Student Loans.

Which Majors Are ISAs Best For?

Will an ISA or a traditional student loan work best for you? Get an idea by reviewing the following list of Majors.

    ISAs vs. Student Loans: By Major

  • STEM Fields (Science, Technology, Engineering & Math Majors) – STEM Majors are the most likely to earn a good income after graduation, with a steady, solid-paying job that allows them to afford monthly student loan payments, and get rid of that debt in a reasonable time; as long they don’t borrow too much – for this reason, I would argue that STEM Majors might want to rely on traditional student loans, rather than ISAs, since they’re likely to be able to afford paying the debt off
  • Healthcare Majors (Especially Nurses and Primary Care Physicians, Dentists, etc.) – Anyone who’s planning on working in the growing and high-paying field of healthcare will probably want to avoid an ISA, since there are all sorts of programs available to help them earn forgiveness benefits for traditional student loans, and because these Majors are likely to lead to high-paying employment positions, meaning roles that would allow you to pay off your traditional student loans relatively easily
  • Liberal Arts & Humanities Majors (Literature, Languages, History, Social Sciences, Political Science, etc.) – Because these degree programs are less likely to lead to stable, high-paid employment positions, they’re better options for taking an ISA as opposed to a traditional student loan,, as Income Share Agreement is likely to allow you additional flexibility on the chance that you do not end up well-employed soon after graduation, perhaps helping you to avoid ending up delinquent or defaulting on loans, and facing a debt that spirals rapidly out of control
  • Artistic Majors (Fine Arts, Music, Theater, Graphic Design, Dance, etc.) – Here’s another category of majors that typically don’t lead to immediate, high-paying employment positions, making them a pretty solid bet for utilizing an ISA to cover your higher education costs; if you end up failing to secure a serious job soon after graduation, the ISA contract may protect you from being driven into inescapable debt far better than a traditional, inflexible student loan ever would

Keep in mind that the advice I’ve provided above assumes all the terms of the ISA itself would be the same, no matter what your Major ends up being; the reality is that ISAs sometimes offer better terms (or worse terms!) to students pursuing specific fields, which would impact your calculations when determining whether the ISA or traditional student loan would end up being your best option.

Another thing to remember is that some people end up working in fields vastly different from their Majors, so if you’d rather try to plan your finances based on what you end up doing, rather than what you study, then you’ll want to refer to this list of ISAs vs. Traditional Student Loans based on career fields.

Which Careers Are ISAs Best For?

ISAs tend to lend themselves to certain careers; typically, they’re better for students who aren’t certain to end up making lots of money regularly, and quickly, because in those cases, traditional student loans may end up being cheaper and easier to pay off.

To find out if your planned career path will be better suited for an ISA or a traditional student loan, review the following list of Career Paths.

    ISAs vs. Student Loans: By Career

  • Web Developers & Programmers – Many of the new non-traditional coding-focused programs and bootcamps provide excellent training options, but many of them aren’t eligible for traditional student loans, so if you’re looking to get your education from a modern institution (NOT a college degree program), then you’ll want to at least consider utilizing an ISA
  • Nurses & Healthcare Workers – Because there are so many programs offering Loan Forgiveness to Nurses, Doctors & Dentists, Licensed Medical Technicians, and other roles in healthcare, it’s probably not a good idea to pursue an ISA, since they DO NOT offer forgiveness benefits, and are thus likely to end up being more expensive than traditional student loans
  • Military Personnel – If you’re serving in the Armed Forces, or planning on doing so, then you’ll want to avoid an ISA, as the many Military Education Benefits Programs included in the Forever GI Bill are likely to cover all of your higher education costs; Military Student Loan Forgiveness benefits delivered via the College Loan Repayment Program are available via Army SLRP, Navy SLRP, Air Force SLRP and the National Guard SLRP Program, which means that an ISA would be a bad idea for military personnel
  • Government Workers – Because excellent Federal Student Loan Forgiveness Benefits are available to all Federal, State and Local Government Employees via the Public Service Loan Forgiveness Program, anyone working for or planning on being employed by the Government, in any role at any level, should avoid an ISA at all costs
  • Non-Profit Employees – The same Public Service Loan Forgiveness Program mentioned above also offers excellent Federal Loan Forgiveness Benefits for Non-Profit Workers, including anyone employed full-time by a 501(c)(3) organization, so this is another career path where you’d want to avoid an ISA and rely on traditional student loans instead
  • Teachers – Student Loan Forgiveness Programs for Teachers may have been slightly cut back in recent years, but there are still all sorts of programs available offering funds for college, like the TEACH Grant Program, and relief from student debt, like Teacher Loan Cancellation Benefits, so Teachers will want to think twice before signing up for an ISA instead of a traditional student loan
  • Artists – When you have no idea whether your huge investment in higher education is going to pay off, which is the situation that anyone pursuing Art is likely to face, then it’s probably a good idea to consider an ISA instead of a traditional student loan, since if things don’t work out, you won’t be on the hook for massive payments, ballooning interest, and a lifetime of inescapable debt

For those of you who haven’t already figured out whether or not an ISA would be right for you, let’s go through some specific examples of when to seek, and when to avoid an ISA.

When to Consider an Income Share Agreement

Because of the nature of the way that ISAs work, there are times Income Share Agreements are a particularly good idea, including:

    Times to Consider an Income Share Agreement:

  • You don’t qualify for any sort of Federal Financial Assistance at all, like Pell Grants, Direct Federal Student Loans, etc.
  • You’ve already exhausted traditional Federal Direct Student Loans, and would need to take out Parent PLUS Loans or Private Student Loans to raise additional funds
  • You know that your job won’t qualify you for any of the excellent Federal Student Loan Forgiveness Programs available to people like Government Employees, Non-Profit Workers, Teachers, Military Personnel, Nurses, Doctors & Dentists, Public Service Workers, etc.
  • You don’t think that your college degree program is going to lead to a stable, good-paying job, and you want to avoid getting buried in an interest-accumulating debt trap
  • You’ve been offered an ISA with exceptionally good terms (like those provided to STEM students), including a high minimum income threshold, a low total payment cap, a long grace period before payments are due, and a low percentage monthly payment, etc.
  • The school offering your ISA is promising to help by offering significant post-graduation support services, like resume writing, networking, job placement, etc. (and you believe they’ll deliver on the promise!)
  • You simply don’t want to participate in the corrupt, broken, and immoral traditional student loan system, which is ruining people’s financial lives
  • You’re notoriously bad at planning, organizing information and following through with basic commitments, like paying bills on time, which would be a disastrous way to handle student loans, but which wouldn’t be end of the world with an ISA

As you can see, there are certainly times when it’d be worth considering the Income Share Agreement, but there are also times when an ISA is likely to cost much more than student loans, so let’s look at when they should be avoided next.

When to Avoid an Income Share Agreement

The nature of ISAs means they work great for some people, but terribly for others.

Here’s a quick list of situations when you’d certainly want to avoid an Income Share Agreement:

    Times to Avoid an Income Share Agreement

  • You qualify for enough Federal Financial Assistance, via Direct Federal Student Loans, Pell Grants or other forms of financing, that you an fully cover the costs of your higher education program through traditional means, without resorting to Parent PLUS Loans, Private Student Loans, or ISAs
  • You’re nearly certain that your college degree program is going to lead to stable, high-paying work, because there’s tremendous demand for your field or specific role,
  • Your loans or career path is almost certainly going to qualify you for some of the excellent Federal Student Loan Forgiveness Programs on offer, like the Public Service Loan Forgiveness Program, Teacher Loan Cancellation Program, or the relief programs available to Nurses, Doctors & Dentists, Non-Profit Employees and Government Workers
  • You’ve been offered an ISA with questionable repayment terms, like a low minimum salary, a short grace period, a high percentage monthly payment, etc., which you’re almost certain will end up costing you more in the long-run than a traditional student loan
  • The school offering your ISA doesn’t have a good track record of placing students in high-paying jobs within solid career fields, and you don’t believe they’ll actually offer much support after graduation, meaning that you don’t need their help, can’t count on it, or simply think it won’t work
  • You don’t want to feel like some kind of Medieval Serf, or an Indentured Servant, who’s income is basically being garnished each month, which could lead you to work against yourself by choosing lower paying jobs, trying to get out of paying back the ISA by sabotaging your own career prospects, etc.
  • You’re an organized, responsible person, who isn’t likely to run into trouble with traditional student loans, because you pay bills on time, work regularly, and don’t think you’ll end up falling behind in payments and accumulating a mountain of inescapable student loan debt

As you can see from the examples above, even though ISAs do offer some pretty significant benefits for certain types of people, or people facing specific financial circumstances, there are certainly times when you’ll want to avoid them anyway, and rely on traditional student loans instead.

How to Decide if an Income Share Agreement is Right For You?

First, see my sections above on the Pros & Cons of Income Share Agreements, Majors Best Suited for ISAs, Careers Best Suited for ISAs, When to Consider an ISA, and When to Avoid an ISA, as these will all help you understand when an ISA would be right for you.

Next, see the list of things to consider below, which will help you evaluate any ISA offer you’ve received, allowing you to determine if accepting it would truly be in your best interest.

    Evaluating ISA Terms & Stipulations

  • Length of the Grace Period – How soon are you expected to start making payments? Right after graduation? More than a year or two afterwards? Traditional Federal Student Loans offer a 6 month grace period, so make sure your ISA comes with at least that much time to find a job and start earning money before they want to start taking payments
  • Minimum Income Threshold – How much much you make before you’re ordered to start sending a percentage of your income to whoever provided the ISA? Is it a really low threshold, like just $10,000, or has it been set a more reasonable level, like a living wage, perhaps around $36,000 or even more? Think about what you’ll actually be able to afford, depending on where you plan on living, before signing the dotted line
  • Maximum Payment Cap – How much is the ISA provider actually expecting to be repaid? Is it just a little more than they’ve provided you in funding, or way more? Student Loans cost the original balance, plus interest, which you’ll need to calculate to determine the true cost of the loan. With an ISA, there’s typically a much firmer, hard cap on payments, so it’s way easier to determine total costs. But is that cost more, or less, than what you’d be facing with a traditional student loan?
  • Percentage of Income Fee – How much of your income is going to be taken for repayments on the ISA? Remember that this factor runs along a sliding scale with the maximum payment cap, and total contract length, so even if you’re facing a small percentage, but they’re going to take that for a long time, and up to a huge total amount, that may not be as good a deal as it sounds like. Attempt to determine just how much you’ll be paying each month, then compare that cost to traditional monthly student loan payments.
  • Fines, Fees, Penalties, etc. – Just like with student loans, there are ways to get in trouble with ISAs, from failing to ever secure a job with an income over the minimum threshold, to leaving the country and attempting to escape making any repayments whatsoever, to somehow finagling a way that you can earn income without the ISA provider being able to tap into it (like by taking cash-only jobs), all of which could land you in hot water, legally speaking, for breech of contract – be sure to read the fine print and understand the potential added costs you may face due to fines, fees, penalties, etc.

At the end of the day, my advice is to not even bother considering an ISA unless you have already exhausted all of your options for utilizing traditional Federal student loans to finance your college costs.

I would not start looking at ISAs until I hit my maximum borrowing cap on Direct Federal Student Loans, and am being forced to consider alternative forms of financing, like Parent PLUS Loans or Private Student Loans, which are notoriously more expensive than their Direct Federal counterparts.

If you’re still confused about whether or not an ISA would be right for you, then please ask any questions you have about them in the Comments section below.

I review Comments on a daily basis, and will do my best to get you a response as quickly as possible!

Regulations on Income Share Agreements

As I’ve mentioned several times throughout this Guide, Income Share Agreements aren’t as well-regulated as traditional student loans, which could be a good or a bad thing, depending on your specific situation, the deal you’ve been offered, and your future career prospects.

And one thing to keep in mind is that the ISA marketplace remains essentially the Wild, Wild West, because schools and companies can offer them with all sorts of different terms, making some ISA contracts excellent, while others are absolutely terrible.

However, this situation is unlikely to persist for much longer, because both the Federal Government and State Governments have begun to wind up the regulatory wheels, and there are now a whole series of pending legislation proposals in the works that will seek to tighten restrictions on ISAs.

Federal Income Share Agreement Regulations

At the Federal level, the “Investing in Student Success Act” was introduced by Senators Marco Rubio and Todd Young way back in 2017, which attempted to introduce a variety of legal restrictions on ISA terms, including:

    Main Tenets of the Rubio & Young ISA Proposal

  • Requiring a Federal regulator to oversee all ISA programs
  • Create a mandatory minimum income exemption of $10,000, meaning no one earning under $10,000 per year would be forced to pay any of their income back to whoever offered them the ISA (in my opinion, this threshold is way too low to be meaningful)
  • Set the maximum repayment period for ISAs to 30 years, so that people don’t have the ISA follow them around for their entire lives (in my opinion, 30 years is far too long a repayment term)
  • Make 15% the maximum limit any individual can be forced to pay for ISAs, even if they have multiple ISA contracts open at any given time (this sounds reasonable to me…)
  • Classify ISAs as “qualified education loans”, which would mean that they, just like traditional student loans, would no longer be eligible for Bankruptcy Discharges (this is a terrible idea, as the inability to eliminate massive student loans via bankruptcy proceedings is one of the biggest problems with the industry)
  • Require that anyone offering an ISA must provide specific consumer disclosures about how the ISA works, including stating that the ISA is not a debt instrument, that the student may end up paying more back than they receive in funds, that the payments will vary based on future income, and that the ISA will not be dischargeable in bankruptcy

I think most of this Federal Bill is not only unnecessary, but counter-productive, so I’m glad to see that it’s stalled in Congress and doesn’t seem to have any further support. At least for now, this appears to be a non-starter.

State-Based Income Share Agreement Regulations

At the State level, things look a little different, and California seems to be taking the lead in producing new regulations governing ISAs, including a bill seeking to test Income Share Agreements at both California State University Schools, and University of California Schools, which could be a really interesting testing ground for this type of funding.

CA appears set to test the ISA system during the 2021-2022 Academic Year, and the Cal State and University of California system schools will be required to report the results of the pilot program to the California Legislature in 2023 and 2026, giving updates about how well it’s worked.

In my opinion, I think it’s a good idea to give ISAs a test within a well-controlled environment like State-funded Schools, because at least here we aren’t likely to see the sorts of rampant abuses that could occur in a privately-funded and totally unregulated environment; in short, they’re less likely to create wage slaves and debt serfs.

Income Share Agreement Calculators

If you’re seriously considering utilizing an Income Share Agreement to cover your higher education costs, then my advice is to make sure that you’ve fully vetted this idea by comparing the costs to traditional student loans.

Perhaps the easiest way to do that is to utilize a tool like Purdue’s Comparison Tool, which allows you to enter details about the ISA you’ve been offered and compare your future payments and total debt to that which you’d be facing if you opted for Federal student loans instead.

You can find Purdue’s ISA Calculator by navigating to their “Back a Boiler” program page, which is the hub of their Income Share Agreement content, here.

What Schools Offer Income Share Agreements?

All sorts of schools are getting in on the ISA game, including traditional 4 year colleges and universities, online-only educational institutions, and a variety of bootcamps and career training programs.

Here’s a quick list of the schools and programs I’ve been able to find offering real ISAs at the time of writing:

    Schools Offering ISAs

  • Lambda School
  • Purdue
  • Colorado Mountain College
  • Allan Hancock College
  • Lackawanna College
  • Clarkson University
  • Norwich University
  • Messiah College

If you’ve found any other schools that aren’t featured on the list above, but which you know offer ISAs, then please reach out to me via the Comments section below to let me know so I can update this list!

What Companies Offer Income Share Agreements?

All sorts of companies are getting involved in the ISA system, as like any other financial vehicle, there are people looking to turn on a profit on the latest potential investment scheme.

Keep in mind that just because a company is listed below, doesn’t necessarily mean that they’re offering a good deal.

    Companies Offering ISAs

  • The Education Finance Institute (helps Colleges/Universities draft/implement ISAs)
  • Pave Income Share Agreements
  • Paytronage
  • Leif
  • Alfie, from F6S
  • Vemo Education

I’m providing this list of companies who offer ISAs to give you as many options as possible when shopping for a contract of your own, but keep in mind that the shopping and selection part of choosing any potential ISA is really up to you.

Not all Income Sharing Agreements are created equally, and unlike student loans, some of them may be very good ideas, or very bad ones.

Make sure that you DO YOUR HOMEWORK, compare the costs of available ISAs against each other, and against traditional student loans, and that you pick whatever option is going to make the most sense for you in both the short and long-term.

Where Can I Get Help With Existing Student Debt?

For those of you who already have student loans, and are looking for assistance in dealing with them, I’ve got good news: this website was created specifically to provide insights and advice on getting rid of student debt without paying for it.

Over the past decade, I’ve developed over 100 different Guides covering virtually every aspect of the student loan repayment process, providing instructions on dealing with both Federal and Private student loans.

If you’re already struggling to pay back college debt, you’ll want to look at some of the other pages of my site where I go through forgiveness programs, discharge opportunities, repayment plans and other financial relief packages in exhaustive detail, explaining how you can access the excellent programs already on offer.

Where To Get Help With Federal Student Debt

If you need Help with Federal Student Debt, be sure to look at my Guides on:

There’s a very good chance that you can find relief from one of the programs listed above, unless you’ve got Private student debt, in which case…

Where To Get Help With Private Student Debt

If you’re looking for Help with Private Student Debt, then you’ll want to look at my Guides on:

While the benefits programs and relief packages for private loans are much more stingy, and far harder to access, there’s usually to find some form of assistance even if you’ve already fallen into delinquency or even default.

And if you’re still lost about how to handle your loans, please post your questions in the Comments section below and I’ll do my best to offer you specific advice on what you should do next!

Finally: Please Help Me Out!

As you can probably imagine, maintaining this website takes a lot of work. It’s basically a second full-time job for me that I have to stuff into free time on evenings and weekends.

I need your help in ensuring that enough people visit FSLD to make it worth my while, so if you found the content here to be useful, then please post a link to my site from your Facebook, Twitter, LinkedIn or Reddit account.

The more people who visit FSLD, the more time I can dedicate to building Guides like this one, and helping people like you!

Thanks for visiting, and thank you so much for your support!


When writing my Guides, I source information from all over the web, but you can rest assured that I fact-check, properly vet, and ensure that the details I present on FSLD are accurate.

Here’s a list of the articles I used to help compile the information for this Guide:


  • https://www.usnews.com/education/best-colleges/paying-for-college/articles/2018-09-26/using-an-income-share-agreement-to-pay-for-college
  • https://www.purdue.edu/backaboiler/
  • https://www.thepennyhoarder.com/smart-money/what-are-income-share-agreements/
  • https://medium.com/make-school/income-share-agreement-vs-student-loan-what-makes-better-financial-sense-fc1a65b4e888
  • https://www.edsurge.com/news/2019-02-15-so-you-want-to-offer-an-income-share-agreement-here-s-how-5-colleges-are-doing-it
  • https://www.edsurge.com/news/2019-03-20-bill-to-regulate-income-share-agreements-moves-through-the-california-legislature-again
  • https://www.edsurge.com/news/2019-04-05-wall-street-wants-in-on-income-share-agreements
  • https://incomeshareagreements.org/income-share-agreements-isas/
  • https://thescholarshipsystem.com/blog-for-students-families/use-income-share-agreement-avoid-student-loans/
  • http://rooseveltinstitute.org/income-share-agreements-student-debt-promise-falling-short-reality/
  • https://www.forbes.com/sites/prestoncooper2/2018/11/06/income-share-agreements-gain-bipartisan-support/#21169bc6155d
  • https://ednote.ecs.org/income-share-agreements-an-old-idea-made-new-but-necessity-to-protect-students-remains/
  • https://www.the74million.org/article/bailey-income-share-agreements-are-an-innovative-way-of-financing-tuition-and-an-investment-in-the-workplace-of-tomorrow/
  • http://www.aei.org/publication/income-share-agreements-are-an-innovative-way-of-financing-tuition-and-an-investment-in-the-workplace-of-tomorrow/
  • https://www.newamerica.org/education-policy/edcentral/rubio-isa-bill/
  • https://www.edsurge.com/news/2018-08-21-income-share-agreement-providers-want-to-woo-higher-ed-but-will-it-work
  • https://www.theatlantic.com/education/archive/2018/06/an-alternative-to-student-loan-debt/563093/

If you’re interested in further researching ISAs, your best bet would be to start typing specific questions into Google, and seeing what comes up!

Remember that this is an entirely new form of lending, and that things can change rapidly in the space.

If you’ve found anything in my Guide that doesn’t seem accurate, please be sure to let me know in the Comments section below so I can update it accordingly!

Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.


Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.