Income Share Agreements on CampusIncome Share Agreement • June 10th, 2015
Contract Type FiledJune 10th, 2015In an ISA, a beneficiary receives up-front funding for educational expenses from an investor. In exchange for that funding, the recipient agrees to share a portion of his or her income with the investor for a set period of time. In some regard, the terms of an ISA mirror those of existing federal student loan programs. Anecdotally, the typical length of an ISA is 10 years, and the percentage of income shared rarely exceeds 10 percent of a student’s adjusted gross income. ISA terms may vary depending on the price and the length of an educational program. Often, the recipient-funder relationship is brokered by a third party, which may be either a for-profit or nonprofit corporation. Often, the third party also fills the role of servicer, verifying a recipient’s income using tax or payroll statements and handling monthly payments.