Beyond the Flexibility of Stride Income Share Agreements
By Oceania Eshraghi
Stride Funding offers not only a more flexible and affordable method of education funding, but also a partnership between investors and the student in which they invest.
Income Share Agreement Overview
An Income Share Agreement (ISA) is an agreement in which education funding is provided to students in exchange for a commitment to pay back a percentage of their expected future income. Stride ISAs also possess key features that offer increased flexibility for students, including a shorter payback period, a minimum income threshold below which payments are paused, and a payment cap. This innovative alternative to traditional fixed payment installment student loans lessens the burden on students by ensuring that payments are always the same, small percentage of income.
Less Risk, More Benefits
It is no secret that when making an investment, investors ultimately expect a fair return. Still, there is a crucial distinction between the incentives of traditional student lenders and ISA providers.
Because most student loans require predetermined, fixed payments in exchange for school funding, the returns that lenders receive for their investments are independent of students’ future earnings. Thus, most student lenders can disengage from students’ education and careers after providing them with payment for schooling. In fact, students are burdened with student loan debt regardless of whether they graduate or their career success. This presents students with the future risk of having to pay more than their income allows.
However, Stride ISAs shift this risk away from students, as the returns received by ISA providers are contingent on the future income of the students. This aligns Stride’s interests with students’ goals of obtaining future success. Therefore, the moment an ISA is granted to a student, Stride becomes immediately invested in the success of that student. This mutual incentive gives rise to the exclusive benefits that Stride provides to optimize both students’ education and career paths.
Personal and Career Resources
Stride provides students with various platforms for career guidance. Stride’s career services are an equally important part of who we are as a company. One of the unique features of Income Share Agreements is that they directly align incentives all across the board, from our investors to the student: if the student succeeds, we succeed. We have developed robust career support services, with everything from resume services and interview prep, to partnership discounts and access to career-specific job boards. These are all aimed at making sure each Stride student has access to the best possible resources available.