Percent of monthly income: 3 percent per ISA. For example, students would be liable for 12% of their income if they had completed an ISA every four years. Through an Income Participation Agreement (ISA), a student agrees to pay for their university education or part of their education by making predetermined payments based on a percentage of their income after graduation. Payments are arranged to reflect the amount of a payment for a similar private loan. Eligibility does not depend on your creditworthiness or current finances, as is the case with the student loan application. However, you must complete the provider`s qualifications to obtain an ISA that likely includes factors such as your current school year and expected future income. Rhetoric and headlines often suggest that income-equity agreements are an important part of the solution to the skyrocketing amounts of student debt. But organizations that make ISA a reality on the ground for university students may be more cautious with the new model. ISAs are different from student loans. But in many of the colleges they offer, they work the same way. Students take an ISA amount — say US$10,000 — and return a percentage of their salary after graduation until the debt is repaid.
Most colleges limit (so far) the total amount a student ends up repaying. The model is designed so that most students end up getting more or less the same return for investors. However, some education experts argue that financial aid is intended to create a level playing field and create economic mobility, not to weigh on the most vulnerable. In addition, critics say such terms could have a disproportionately negative impact on women and blacks, who are more likely to study in low-paid fields such as social work and less likely in high-paid sectors such as engineering. Neuwirth agreed. Last fall, her fifth and final year as a double major in food science and biological engineering, she received a job offer from the Cargill farm business for a salary of $56,000. If everything goes according to plan, it will ultimately make a healthy profit for these investors.