A Better Way to Pay for Your Education
Learn whether an Income Share Agreements (ISA) is the right option for you. ISAs differ from personal loans in important ways.
ISA Key Terms
Income Share Agreement Amount
The amount funded towards your education.
Income Share Percentage
The percentage of your income repaid after graduation, once you are gainfully employed.
Annual Income
For repayment purposes, your annual income is determined using your pre-tax earnings .
Monthly Payments
The actual dollar amount repaid each month. Although your Monthly Payments will vary with changes in your earnings, the ‘percentage’ of your earnings stays the same.
Minimum Threshold
ISA repayments are automatically paused whenever your monthly income is less than the Minimum Threshold. Think of this as a “Floor”. If you’re earning less than the Floor, you won’t have to make any payments.
Payment Cap
For high earners, the most you might have to pay is limited by the Payment Cap. If your total monthly payments hit your Cap, your payment obligations stop, even if you made less than all Required Payments.
Required Payments
This is the number of monthly payments you are required to make, but only when earning more than the Floor, (and you’ll never pay more than the Cap).
Payment Window
This is the outer limit on your payment obligations. Even if you paid back less than the amount you received, your ISA will automatically terminate at the end of the Payment Window.
How it Works
Financing your education with an ISA in 5 steps
1. Apply & Attend Your Program
Apply for your desired program through our e-application.
2. Graduate & Start Your Career
With an ISA, interest does not accrue while you’re in school, unemployed or even under-employed.
So, you can focus on your studies without unnecessary distractions.
Once you land a job and are making above the Minimum Income Threshold, you will begin paying back your ISA, calculated as a percentage of your pre-tax earnings.
3. Built-in Deferment Benefits
Unlike traditional private loans, with an ISA, if you loose your job or are earning less than anticipated, your ISA payments will be automatically deferred, with no interest accrual.
4. Your ISA is Satisfied
You can satisfy your ISA in one of three ways:
1. Make the required number of monthly payments.
2. Your total payments reach the Payment Cap.
3.Your Payment Window elapses (irregardless of how much you paid).
Lauren’s ISA
Lauren needs $20,000 to finish her last semester of college. She applies for an ISA for $20,000 in exchange for 10% of her income for 36 months after graduation and once she secures a job.
Student Retention
After graduation, Lauren is unable to get a full-time job at an accounting firm like she was planning. To make ends meet, she finds a job at Starbucks. Her yearly income is $20,000, since she used an ISA to pay for college she doesn’t have to make payments. Why? Because ISA terms include a payment floor or Minimum Income Threshold, to protect students who aren’t able to get a great paying job to support themselves after graduation.
Peace of Mind
Lauren becomes sick and unable to work for 6 months. Since Lauren is not earning during this time, her payments automatically pause without any interest accrual.
Completing Your Income Share Agreement
Because her school offers an ISA, Lauren is able to continue college and graduate without fear of the inability to pay upfront or the thought of growing interest from a student loan. Lauren can fully focus on her education, without the pressure to get a part-time job because she doesn’t have to make any payments until after she graduates and lands a job.
Frequently Asked Questions
Have a question we didn’t answer here? Contact our support at help@meratas.com
What is an Income Share Agreement?
An Income Share Agreement (ISA) is a contract between Student and School, where in exchange for educational financing, the Student agrees to share a fixed percentage of their post-graduate earnings over a set period.
Because the amount paid back is calculated as a percentage of your future earned income, payments will automatically adjust to your ability to pay, and should always remain manageable. And, since payments are measured against your actual earnings, with an ISA, it is ok if the amount you ultimately payback is less than the actual cost of tuition.
Am I eligible for an Income Share Agreement?
To be eligible for an ISA, you must be a U.S. citizen or permanent resident, and over 18 years of age.
While your credit score is not a priority, we do run a ‘soft’ credit check, and certain qualifying factors may overlap with items also included in your credit score, such as: whether you have any recent garnishments, lien attachments, judgments, or tax liens, bankruptcy, or other unsatisfied suits, which might reflect negatively against your application to one of our Partner Programs, irrespective of your credit score.
What makes an ISA more flexible than personal loans?
With an ISA, your payments are calculated as a percentage of your actual earnings, so the amount you pay back may ultimately be less (or more) than the amount you received.
Compared to private traditional loans, you don’t need a cosigner, and credit score is less relevant when applying for an ISA.
With an ISA, your payments to us will automatically halt during periods of unemployment, under-employment, or if you are unable to work due to serious illness. With an ISA, it is like having built-in insurance protection for the cost of your continued education.
These built-in protections come standard and are a key feature that makes an ISA safer than traditional personal loans or taking on credit card debt.
How Do ISAs differ from traditional private loans?
With traditional private loans, the borrower must pay back the principal amount borrowed plus accrued interest, irrespective of future income or employment circumstances. This means with a traditional private loan, if you lose your job, you still need to repay your loan.
With personal loans, failure to pay back all accrued interest can lead to something called “negative amortization”, which means despite making monthly payments, the principal loan balance is actually growing, leaving the borrower with a seemingly ever-growing mountain of debt.
With an ISA, there is absolutely no risk of negative amortization, because all ISAs come with a Payment Cap, which limits the most anyone might ever have to pay.
How are my ISA payments calculated?
After completing your program, your monthly payments will be based on your specified income share percentage multiplied by your gross income for the contract term.
With an ISA, your monthly payments may fluctuate (up or down) based on changes in your monthly earnings, but the amount you pay will always be the same fixed percentage of your income.
Since your monthly payments are indexed to your earnings, if you become unemployed, face unexpected salary shocks, or other work-related financial hardships, your monthly payments will be commensurately lowered or waived entirely. We call this automatic deferment, but you can call it peace of mind.
When will my payment obligations end?
There are 3 ways to satisfy your ISA payment obligations. Your ISA contract will terminate at the first to occur of:
(i) You make all your Required Payments;
(ii) Your total payments reach your Payment Cap; or
(iii) You reach your Payment Window.
At the end of the Payment Window, your ISA Contract will terminate, even if you made less than all Required Payments, and even if you paid back less than the amount you received.
When do I begin repaying my ISA?
Your ISA payments will not begin until:
(i) You have completed (or withdrawn from) your educational Program; and (ii) You are earning more than your Minimum Income Threshold. Until both these conditions occur, you will not be required to make any repayments, and there will be no interest accruing during periods of deferment.
What if my program doesn’t offer an ISA?
We’re constantly adding new partners to our Platform. If there’s a program you’re interested in, which does not yet offer an ISA, please let us know here.