However, those who are skeptical of ISAs say that students considered more likely would benefit from a successful ISA, which could ultimately lead to prioritization of student groups because of their background or field of study. And students who end up finding high-income jobs can ultimately pay off far more than the cost of a traditional loan. Holberton already offers revenue-participation agreements. But the school “cannot accommodate as many students as we would like because we have limited cash flow,” said Sylvain Kalache, co-founder of Holberton. He hopes that the new financial instrument will allow the school to add more students who want to pay for teaching through isA. In the case of income-participation agreements, students do not pay for education when they start a program, but pay a percentage of their income for a period after graduation. But schools still need working capital to deliver educational programs. Edly asks schools to post shares of their ISAs on the platform. When investors buy these notes, it takes a small percentage of that cash flow. Edly would not reveal the percentage she plans to take, but says it is a “single-digit” fixed tax. Investors buy on a first-come-first-served basis.
Instead, Ricciardi believes that investors are attracted to ISAs as an alternative to fixed-rate investments such as bonds. “While the return may not be high relative to venture capital returns or equity returns, if they are higher than other fixed-rate returns, it may be attractive to investors,” he says. On average, Leif`s partner schools recorded an 86% increase in qualified applications. The Leif platform offers schools an all-in-one solution that offers personalized programs, implementation and start-up support, regulatory advice, revenue reviews and payment management, as well as scalable growth financing solutions. Proponents of income-participation agreements argue that the funding model offers an alternative to private student loans and shifts the risk of borrowing from students to training providers and investors. About Leif: Leif is a technology company committed to improving access to quality and affordable education. The company has developed an end-to-end platform that enables the design, creation, management of programs and funding of income Share Agreement programs. As an infrastructure class that supports the ecosystem revenue-sharing agreement, Leif works with schools and mission-focused funding partners to provide students with some form of results-based education funding. Learn more about leif.org. Thompson also said she was concerned that ISA students could prevent students from borrowing federal funds that also have income-based repayment options and could offer the same conditions, regardless of the student context.