A new way to finance your education
If you are looking at different ways to finance your education, you might have missed the Income-Share Agreement (ISA).
A concept implemented by the Lambda School, a computer science academy, they prepare computer scientists at no upfront cost. As stated on their website, "Lambda covers your tuition costs until you earn at least $50,000 a year". This means that if you don't land a high-paying job after graduating Lambda, you don't owe them anything.

While this comes as no big surprise in the world of coding schools, it is a very new idea among traditional universities. Reading an article in The Seattle Times, I came upon three institutions in the United States that have been trying to offer a new alternative to private loans.

I have reached out through email to all three universities — Purdue University, University of Pittsburgh, and Indiana University — to find out more about their programs.

In their email, Purdue has kindly sent me to their Frequently-Asked Questions page. Striving to create an alternative to private and Parent PLUS Loans, the Purdue Research Foundation launched their Back a Boiler — ISA Fund. According to Purdue, the ISA is a "contractual agreement in which a student receives education funding in exchange for an agreed upon percentage of post-graduation income over a defined number of years."

This program is available to rising sophomores, juniors and seniors who are enrolled on a full-time basis at the West Lafayette Campus. Among the eligibility requirements, the student also has to be a U.S. citizen or a Permanent Resident, 18 years of age or older; have current and anticipated financial obligations at a reasonable threshold, meet Satisfactory Academic Progress, and have a declared major.

After graduation, the student simply has to pay the agreed upon percentage of revenue for the time period stated in the contract. The ISA payments are adjusted based on the income levels. As mentioned on the official website, "there will be a minimum income threshold and a maximum payment cap, so students who use the program will not pay if they do not meet a minimum income level, while those who earn a substantial amount of income will not pay above a certain maximum amount." On top of that, after the student makes all the payments, no additional payments will be required even if the student pays less than the funding amount they received.

Funding may vary based on each student's particular case. Also, you can receive the ISA throughout your sophomore, junior, and senior years, but each will be its own contract, and the terms and percentages may vary.

The minimum amount starts at $5,000 for students enrolled during fall and spring, and $2,500 for students enrolled during the summer. The application can be completed online at purdue.vemo.com

University of Pittsburgh took a different approach. Their Panthers Forward Program is designed for graduating senior class, who have taken out Federal loans to help pay for their tuition. "The application process is very competitive," writes Lauren E. Panetti, Associate Director of International Recruitment. The program is available to seniors that are U.S. citizens or eligible non-citizens.

While international students cannot participate in this specific program, Lauren E. Panetti talks about scholarships for incoming first year international students, "which are renewable for up to four years provided the student maintains a 3.0 GPA." Students who apply by the February 1 deadline are automatically considered.

The third university I contacted was Indiana University. Although Kristi from Student Central of Indiana University informed that the university "does not participate in any type of Income Share Agreement", they do in fact provide annual debt notification letters to students. Moreover, they have MoneySmarts education tools and offer consultations to their students.

While this is a relatively new phenomena in the world of universities, it will undoubtedly become one of the ubiquitous ways to finance your education, along with loans and scholarships.
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