Income Share Agreements vs. Loans: What's Your Best Option?

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Income Share Agreements vs. Loans: What's Your Best Option?

If you're researching payment options for bootcamps and accelerated learning programs, you've probably come across an income share agreement, or ISA. With an ISA, you pay little or no tuition upfront, and in return, you give the school a percentage of your paycheck. While this sounds like an interesting option, here's what you should consider when choosing between an ISA and a Skills Fund loan.

What's the real cost?

Over the lifetime of your ISA or loan, you’ll likely pay more than the initial amount you borrow. When evaluating your bootcamp tuition funding choices, you should know what you could end up paying – make sure to calculate the total lifetime cost for each option.

To get you started, we’ve compared the maximum total cost of borrowing tuition for four different programs. Each ISA and loan example is based on a real, current option offered by a top bootcamp.

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To calculate the lifetime cost of a Skills Fund loan, find your school at Skills.Fund/Students and use the free online loan calculator. To calculate the lifetime cost of an ISA, we recommend determining the ISA's tuition payment cap, summing up your expected payments, or meeting with a financial advisor.

Is your school invested in your success?

ISA

ISA agreements vary. In theory, ISAs ensure schools are invested in your success because the school won't get paid unless you do. However, with some ISAs, you're responsible for payments even if you don’t manage to land a job in the field you’re studying. When you reach a certain salary – usually around $40,000 – you might still have to give your school part of your paycheck, regardless of your role.

LOAN

Skills Fund partner schools put money on the line for every loan, and they’re evaluated every year to ensure they maintain high job placement rates. If you're successful, land a job in-field, and pay off your loan on time, your Skills Fund partner school succeeds as well. They’re invested in your success, too.

Can you plan your payments?

ISA

Your ISA payments can change depending on your salary, making it harder to plan ahead and budget for your future.

LOAN

With a fixed-rate loan, your payments won't change. You can accurately budget for your loan from start to finish with the Skills Fund loan calculator.

What are your school's real outcomes?

Check your school's performance data thoroughly before you sign up for any plan – whether it's a loan or an ISA. If you're going to invest your money or time in a bootcamp, you want to know it has the potential to transform your career.

You deserve the best return on your education, so Skills Fund only works with schools that pass our rigorous quality assurance process. Before partnering with any bootcamp, we ensure they meet our high standards for instructor quality, job placement rates, average graduate starting salary, curriculum, and more. Our partner schools are a life-changing investment you can feel good about.

Originally published April 3, 2019.