ISAs have four important terms: the principal, the income share, the period, and the payback cap:

  • Principal: the amount of money the student receives upfront
  • Income Share: a percentage of pre-tax income, due monthly beginning six months after graduation
  • Payback Period: the maximum number of months for which a borrower owes income
  • Payment Cap: the maximum amount the borrower can pay back, as expressed as a ratio of the principal

A borrower begins payments once employed, and continues making payments until their Payment Period expires or they hit the Payment Cap. Payments are equal to their income share times pre-tax income.

So if a student receives $10,000 for a 120-month, 3% income share, then gets a job with an annual salary of $50,000 after graduation, their monthly payments will be $125 (3% of their monthly income of $4167). At the expiration of the payback period they will have paid back $15,000 total.

Your terms may vary - the payment term may be less than 120 months, and the income share may vary, although it's typically between 2 and 5% of pre-tax income. Apply today to get a quote that's tailored to you!

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