What are Income Share Agreements?
In regards to coding bootcamps, an income share agreement (ISA) is basically an arrangement you make with the coding bootcamp you’re enrolled in where a percentage of your salary after graduation will be paid to the coding bootcamp for a fixed period of time. The specific terms of these coding bootcamp ISAs can vary, but usually the salary range percentage a coding bootcamp enrollee will agree to pay will fall somewhere between 8% – 25% over a period of 1 to 4 years.
- ISA: when you pay a portion of your future salary back to your coding bootcamp in order to fund your education with them
- How much do you pay back? Generally 8% – 25% of your salary
- For how long? Anywhere between 1 – 4 years is typical
What’s the Difference Between an Income Share Agreement and Deferred Payments?
While both ISAs and Deferred payments present great options for those looking for ways to pay for coding bootcamp, there are differences between the two options. Basically, while ISAs operate on the agreement of paying back your coding bootcamp in percentages (i.e. [x]% of your future salary for [y] years), deferred payments operate on fixed, predetermined payments that don’t leverage percentages.
Here are some examples of what these differences could actually look like. Please note these examples aren’t factoring in interest.
Example of Deferred Tuition for $17,500 course
- In this example let’s say one pasy $3,000 up front – that leaves $14,500 left. The program can stipulate that the remaining payment of $14,500 can be paid back in fixed amounts (not percentages) over a period of time. So that may potentially look like 12 payments of $1,208 over the course of a year or 24 payments of $604 over the course of two years.
Example of Income Share Agreement with $17,500 cap
- In this example one doesn’t pay anything upfront and the maximum you would pay is the $17,500. Let’s say that the ISA is 17% of one’s salary over 3 years (once a job is found) with a repayment cap of $17,500. At a yearly salary of $65,000, 17% would be $8,450 over the course of one year. With $8,450 in year 2 and $600 in year 3. At 17% over three years the payments would ultimately add up to $17,500.
Advantages of Income Share Agreements
The reality is that coding bootcamps that offer income share agreements to their students present a great opportunity for those who want to learn coding but can’t afford the education on their current income. It also creates accountability on the side of the coding bootcamp, which basically ensures that the goals of students are aligned with those of the coding bootcamp (the goal being to land strong job placement post-graduation). This is in contrast to more traditional avenues of financing education which usually entail a direct loan where payments are typically expected after course completion and not upon job placement.
The other advantage of income share agreements is that as a learner in a coding bootcamp, you usually don’t have to worry about any upfront tuition costs besides the nominal deposit to hold your seat. This is a huge relief and just allows you to focus on what’s truly important during the program – learning! On the same spectrum income share agreements are also great because if you want to enroll in a coding bootcamp to improve your career prospects, you don’t have to have thousands and thousands of dollars saved up in order to be eligible to enroll. The pool of applicable candidates is much more open when you go the route of ISAs.
Disadvantages of Income Share Agreements
One of the main points of criticisms that come up in regards to income share agreements is the framework being built up on salary percentage paybacks. For example let’s say you’re earning approx. $35,000 before coding bootcamp. Then after you leverage an ISA to enroll and complete the course, you land a job with a salary of $70,000. That’s awesome, but that ISA you agreed to featured a percentage payback portion of 15%. That ends up working out to $10,500 over the course of however many years the agreement is for (as previously mentioned, the term can be from 1 – 4 years). While you’re still making more than you had previously made before the bootcamp, a significant percentage portion of your salary goes back to the coding bootcamp you completed and sometimes the portion you pay back exceeds the normal cost of that bootcamps tuition.
Obviously weighing the pros and cons of this feature is contingent upon each individual to determine whether or not an ISA is the proper course of action for them. Some people decide it’s worth it in order to improve their overall careers and some people pursue other options that may be available (like deferred payments).
What if I don’t Find a Job After Graduation?
This is a common question and one’s that honestly very smart to ponder when you’re considering using an income share agreement to pay for your coding bootcamp. Some schools do actually offer a grace-period of approx. 3 months for successful coding bootcamp graduates to find a job. This can alleviate some of the stress of not finding a job after graduation, but whether or not that 3 months is enough is really determined on how each individual coding bootcamp graduate hunts for that new job.
To accommodate a wider range of students hunting for new jobs after coding bootcamp, some schools also even allow a grace period of up to one year. There are even some schools that have extra added accomodations for coding bootcamp graduates that don’t require payments to start unless that individual has found a job paying more than $40,000 within 8 years of graduating.
What Should I Know About Coding Bootcamps with Unique Payment Plans?
The reality of any type of repayment agreement is that you really need to hone-in on the fine print. Read everything thoroughly and understand the terms you are agreeing to when you sign into an income share agreement with your coding bootcamp. That way when you complete your program, find that awesome new job, and the payments start to kick in, you aren’t surprised by unexpected details.
In addition to reading the items yourself, certainly leverage your resources at the coding bootcamp for understanding the terms of the income share agreement plan. Set up appoints to speak with the financial facilitators or whoever the stakeholders are for managing ISAs.
Here are some questions that you may find helpful when evaluating an income share agreement with the coding bootcamp’s representative.
1) Once you complete the program, do you have to accept the first job that you’re offered?
- Some programs structure this clause into their agreements. Understanding how this may impact your own personal goals for coding bootcamp enrollment is paramount in order to determine if an ISA is right for you.
2) Does the income share agreement you’re considering signing require you to be earning a minimum salary at your new job before the percentage payments kick in? Or will you be required to start paying back on your ISA regardless of your salary?
- This is a question to consider in regards to understanding the possible disadvantages of ISAs. Some ISA programs require you to pay a higher percentage if you salary is on the lower end of the spectrum. The numbers are generally specific to each program so please be sure to ask for details on this when you reach out.
3) Are there any payments caps or restrictions on paying back within the income share agreement?
- It’s paramount to have an understanding of how long the term is going to be for your salary percentage payments and what those caps are. In some instances if there are no caps it’s possible to end up being locked into an ISA where you end up paying more than you would have over a period of time as compared to a traditional loan.
4) Ask what the income share agreement stipulates should you not find a job after the allotted time frame.
- Are you protected in these instances? Will you still have to make payments even if you don’t have a new job?
5) This one is important – when all the costs are tabulated across all coding bootcamp financing options, which options will actually be the most financially responsible (i.e. less expensive)?
- Sometimes not all the costs or fees are understood when evaluating different coding bootcamp financing options. Get an understanding of how each item works, put it all out in front of you, and weigh the actual end of the day costs to see the true total cost of each option available.
Qualifying for an ISA
ISAs are still a form of financial aid, which means that there are eligibility requirements to be met in order to fund your coding bootcamp. ISA eligibility varies from institution to institution however there are some commonalities that one can expect.
- This can be an indicator to the ISA-issuing institution of whether or not you have a history of presenting a potential financial risk to a lending party. If a school is going to invest money in your education for the goal of having the terms of the ISA fulfilled, a good Credit Score is important. Depending on the school, some bootcamp will accept students with bad or no credit history.
- Since employment after the coding bootcamp is a key facet of an ISA, employment history can impact eligibility. For example if one has an employment history that features gaps or many short-term period of employment, an ISA-issuer may take notice.
Since eligibility requirements must be met, it’s possible for some candidates to not qualify for an Income Share Agreement plan. Please review the requirements to qualify with each specific institution you’re applying to in order to ensure you’re able to fund your coding bootcamp experience.
Which Bootcamps Offer ISAs?
Here are 10 programs that offer ISAs!
Location: Online and Nationwide in over 20 cities
- Online, In-person, full time, part-time, self-paced
- Income Sharing, Living Stipends and pay upfront options
- After finding a job earning $40,000 or more, students can expect to pay 15% of their salary for two years
Thinkful has designed their program catering to the preparation of those who want to enter software engineering roles (and who are looking for a salary increase). That’s why their coding bootcamp offers programs in full stack web development, data science, data analytics and product design.
Location: Houston, TX and Atlanta, GA
- Enroll with an ISA or Full-Time Tuition: $13,950 | Part-Time: $9,500
- After finding a job earning $40,000 or more, students can expect to pay 15% of their salary for three years
3) General Assembly
Location: San Francisco, Seattle, Denver, Dallas, NYC, Washington DC, Boston, Los Angeles, Austin, Chicago, Atlanta and US International locations like Hong Kong, Sydney, Singapore, Melbourne, and London. Online coding bootcamps also offered.
- Upfront cost of $14,950 | or candidates can opt for an income share agreement, deferred loan, or the option to pay the cost in installments.
- For ISAs, After finding a job earning $40,000 or more, students can expect to pay 10% of their salary for four years (with a 1.5x cap on the agreement)
Available income share agreement eligible programs within General Assembly include code training, data science, and design. The ultimate goal of General Assembly is to help everyone around the world gain the skills they need to have the career they want while also ensuring that global companies are getting the highly trained workforce that they need to grow.
4) Flatiron School
Location: Atlanta, GA
- Upfront cost of $15,000 | or candidates can opt for an income share agreement (with an initial $2000 enrollment fee)
- For ISAs, After finding a job earning $40,000 or more, students can expect to pay 10% of their salary for 4 years (with a 1.5x cap on the agreement)
Income share agreements can be used at Flatiron for coding bootcamp programs covering software engineering, data science, and UX/UI design. Even though Flatiron is available in multiple locations, ISA eligibility is only an option for those in Atlanta.
Location: San Francisco, CA
- No upfront cost and candidates are offered to opt into an ISA
- After finding a job, students can expect to pay 17% of their salary (and/or internship earnings) for 3 years
Holberton specializes in training full stack engineers. Their coding bootcamps are structured on 100% hands-on learning and the curriculum leverages peer-learning and project based pedagogy.
6) Lambda School
- Upfront cost of $20,000 | Or candidates can enroll in an income share agreement
- After finding a job earning more than $50,000 a year, students can expect to pay 17% of their salary for 2 years
7) Launch School
- Candidates can enroll in an income share agreement
- After finding a job students can expect to pay a percentage portion of their salary over the course of one year.
Structured as a 1 to 2+ year program, Launch School built their curriculum around mastery-based learning to train full-stack software engineers. The coding bootcamp features the Launch Core Curriculum – completion of which makes one eligible to apply for the Capstone Mentoring program.
8) Mayden Academy
Location: Bath, England
- Upfront cost of £8,000 | Or candidates are offered to opt into an ISA
- After finding a job, students can expect to pay 10% of their salary with 0% interest until the full tuition amount is paid
Structured as a 16-week, full-time bootcamp, Mayden Academy is committed to preparing students for junior development roles with a foundation in full-stack development. Within the Mayden Academy program, students may also take select elective modules at their own discretion.
- Zero upfront cost through their income share agreement
- After finding a job earning $1000 per month (in a software related job), students can expect to pay 15% until they’ve paid back $15,000
10) Turing School
Location: Denver, Colorado
- An upfront cost of $20,000 | Or candidates can enroll in an ISA
- After finding a job earning $35,000 or more, students can expect to pay 7.75% of their income for 5 years (with a repayment cap of 1.75x of the upfront cost)
11) Rithm School
Location: San Francisco, CA
- An upfront cost of $23,000 | Or candidates can enroll in an ISA
- After finding a job earning $60,000 or more, students can expect to pay 17% of their income for 2 years (with a repayment cap of $34,500)
Candidates in the Rithm School are full-time learners who will receive development skills training in back and front end engineering. Rithm is focused on immersive, hands on learning and is known for a low student to teacher ratio.
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Coding Bootcamp Income Share Agreements (ISA): What are they and How do they Work?