The Evolution of Impact for Income Share Agreements
by Neha Menon and Alie Goldblatt
As students head off to college, many face the prospect of finding a way to fund their education. Income Share Agreements, or ISAs, have re-emerged as an alternative to traditional student loans. Instead of taking out a loan to cover costs for higher education, students can enter an agreement to pay a fixed percentage of their future income after graduation for a certain number of years. Stride Funding is disrupting the traditional student loan space through their innovative ISA model--providing students with a more flexible option for funding their education. Stride Funding is student friendly. Namely, the Stride ISA payback period generally lasts 5-7 years and the total amount paid is capped at two times the amount borrowed.
Stride ISAs are uniquely positioned to transform higher education by making it more accessible for all. A U.S. News & World Report stated that first-generation low-income students may find increased access from ISAs, and may benefit from the flexible terms based on their future outcomes. Serving this student population, may also produce higher social-impact returns for ISA investors. The Stride ISA model similarly holds potential for social impact. Furthermore, Stride Funding has started to develop as a “pay-it-forward” model. Future returns on investment will generate increased funding to support future students’ ability to afford higher education.
Only 75 U.S. colleges have piloted personalized, college-specific ISA programs. Stride Funding can fill these gaps by providing thousands more students across the country with the opportunity to finance their education through ISAs. Students that may shy away from the traditional loan repayment timeline of up to 20 years (with an added accruement of interest) can find a shorter repayment option of 5-7 years along with greater repayment flexibility through Stride Funding. Basing payments on a fixed percentage of income and placing a minimum income threshold (until the repayment kicks in) ensures students can maintain financial grounding. Additionally, Stride does not require a co-signer. Stride Funding provides a strong personal support system for its ISA grantees and boasts a diverse network for professional and career growth, furthering its potential impact for current and future generations of students.
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