WCCU Investment Consultants
Brandi Walton
Wealth Advisor
2403 Hwy 14 East
Richland Center, WI 53581
608-647-8835 x1109
BrandiWalton@WCCUInvestmentConsultants.com
www.WCCUInvestmentConsultants.com
 
 




What is a college income-share agreement?

A college income-share agreement, or ISA, is a contract between a student and a college where a student receives education funding from the college today in exchange for agreeing to pay a percentage of future earnings to the college for a specified period of time after graduation. The idea behind ISAs is to minimize the need for private student loans, to give colleges a stake in their students' outcomes, and to give students the flexibility to pursue careers in lower-paying fields.

Purdue University was the first college to introduce such a program in 2016. Under Purdue's ISA program, students who exhaust federal loans can fund their education by paying back a share of their future income, typically between 3% to 4% for up to 10 years after graduation, with repayment capped at 2.5 times the initial funding amount.1

A handful of other colleges also offer ISAs; terms and eligibility requirements vary among schools.

ISAs are considered friendlier than private student loans because they don't charge interest, and monthly payments are based on a student's income. Typically, ISAs have a minimum income threshold, which means that no payment is due if a student's income falls below a certain salary level, and a payment cap, which is the maximum amount a student must pay back relative to the initial funding amount. For example, a payment cap of 1.5 means that a student will pay back only 1.5 times the initial funding amount. Even with a payment cap, a student's payment obligation ends after the stated fixed period of time, regardless of whether he or she has fully paid back the initial loan.

1 U.S. News & World Report, September 26, 2018


WCCU Investment Consultants

501 N Main Str., Westby WI 54667; Ph. (608)634-3118

1302 N Main Str., Viroqua, WI 54665; Ph. (608)637-6200

 2403 Hwy 14 E, Richland Center, WI 53581; Ph. (608)647-8835

1333 South Blvd., Baraboo, WI 53913; Ph. (608)355-5500

820 Viking Dr., Reedsburg WI 53959; Ph. (608)768-9228

70 Commerce, Lake Delton WI 53940; Ph. (608)678-4000

 

Securities and Advisory Services offered through Commonwealth Financial Network®, Member FINRA/SIPC, and a Registered Investment Adviser. Fixed insurance products and services offered through CES Insurance Agency or WCCU Investment Consultants. Non-deposit investment products are not federally insured, involve investment risk, may lose value, and are not obligations of or guaranteed by Westby Co-op Credit Union. Westby Co-op Credit Union aka WCCU Credit Union, WCCU Investment Consultants, Commonwealth Financial Network®, and CES Insurance Agency are separate and unrelated entities.

This communication is strictly intended for individuals residing in the state(s) of AZ, IL, SD and WI. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019.