Mike Mahlkov: So Yale tried something like income-participation agreements, but they had some structural problems. In fact, everyone in one year at Yale was paid for their courses, and then they had to pay back the full amount until each course was covered. And there were some counter-reactions because some students were making a lot of money and had to subsidize all the other students. The education sector`s current fascination with income-participation agreements – where students typically pay one per cent of their future income instead of pre-education – is no better than in the current harvest of Y Combinator graduates. More than half of the accelerator`s current educational enterprises offer ISAs to attract students to their services. As it failed in public in the 1970s, there was a lot of scorched earth in the United States. It failed again in 2011, when some startups tried. The regulations were not clear either, but that is changing. An Income Participation Agreement (ISA) is a monetary agreement that provides a service for a person, provided that he agrees to repay a percentage of his income for a certain period of time, which can take months or even years. When checking these ISA providers, compare concepts such as the income threshold and the repayment limit, in the same way that you would appreciate student loans based on their interest rate and repayment period.
If you look at the revenue shares, you can make sure you get an ISA from the company that best meets your needs. Depending on the main material and the amount received, they can expect to repay 2.85% of their employer`s salary for a period of 3 to 10.5 years. However, they can defer their income when they earn less than $20,000 or go to school at the end of the year. Look at the university`s ISA comparison tool to measure its usefulness for your situation. With Lambdas ISA, they cover all your $30,000 in exchange for 17% of your income for 24 months, but you only start making monthly payments when you earn $50,000. Microverse offers a six- to eight-month program for all developers who are fluent in English and can commit to a full-time plan. The school is working on a income-participation contract that requires students to repay 15 percent of the salary as soon as they earn more than $1,000 a month, with a cap of $15,000, says founder Ariel Camus. Now, start-ups are offering income-participation agreements as a solution to a wide range of problems, including education.