Planning for a career change can be scary, especially if you don’t know if you can afford it. Income share agreements (ISAs) and their “Study now, Pay later” structure are unlocking several careers that were once financially inaccessible for many. But perhaps even more enticing than the promise of being able to afford your career change is the aligned incentives that ISAs offer.
Unlike many traditional student loans, ISAs are loans that offer multiple benefits to students. These agreements align the fortunes of the funder and the recipient. The funder invests in the recipient’s education, and the recipient promises to repay the funder once their future income reaches a certain threshold before taxes.
More students get the chance to chase their dreams thanks to a lower initial financial burden. Funders recoup their investments—often enough to keep the same opportunity open to more students who will come later.
And though this is the story that you often hear about ISAs, there’s another story that isn’t told as often. What about the students who don’t find a qualifying job after graduating with an ISA? Thanks to Meratas and its student-friendly features, you’re covered with numerous protections that help make your new career journey last, even with an initial hiccup.
Meratas offers income share agreement programs with student-friendly features to make education accessible for all.Take a look at Meratas’ payment plans here.
Income Share Agreement Benefits If You Don’t Get a Job
We’ve covered some of the student-friendly features that Meratas bakes into its agreements before on this site. Every ISA has a payment window, the period where the funder can collect their portion of a recipient’s income after graduation.
Some of the most important benefits that ISA recipients can access through many Meratas agreements include minimum income threshold, easy deferment, and strong student success teams.
Minimum Income Threshold
The minimum income threshold is one of the most important benefits that ISAs have to offer. Traditional loans enter repayment the moment that you graduate from your educational program. Most ISAs, however, don’t require you to start paying back your loan until you meet a specific minimum income threshold.
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These ISAs only enter repayment once you start earning a monthly income above a specified amount. Unlike traditional loans, there’s little to no guesswork when it comes to being able to afford your payments. You’ll know the exact amount of money you’ll need to start earning before you even sign the agreement. And you’ll also know exactly which percentage of that pre-tax income will go to your ISA funder.
Whether you start earning quickly in your new dream job, or you happen to find a well-earning job in an unrelated field, you can expect manageable monthly payments that are indexed to a percentage of your future earnings. If you don’t find a job making above the minimum income threshold during your ISA’s payment window, you never pay. Though this is a rare occurrence, it’s an extreme example of how ISAs align incentives between an educational institution and its graduates.
But what if you do get a job above the minimum income threshold, and then you lose it? You’ll have to enter the deferment process. Under traditional loans, this process can often be a long and arduous journey, but with a Meratas ISA, it’s much simpler.
Some people don’t have the perfect ending after finishing a new educational program. If you need a little extra time to get back to paying your Meratas-powered ISA, all that stands between you and relief is a simple six-question form.
With federal loans or private student loans, deferment can be a painful process with no guarantees. In many cases, even if you are granted deferment, the loan will continue to collect interest, even if you aren’t paying. With these ISAs, you’re granted a true deferment. The ISA stays completely frozen in time until you’re ready to start paying again.
One thing to keep in mind is that several educators extend the payment window on your ISA for the length of your deferment. So while this process isn’t a magical get-out-of-jail-free card to put off payment until the end of your agreement’s term, it’s still a very useful way to give yourself some breathing room in tough financial times.
When it comes time to find that first job that helps you clear the minimum income threshold, you’re often in good hands. The ISA model relies on students finding high-paying employment quickly, as the faster students start earning the minimum income threshold, the faster they start repaying.
Several educators that offer ISAs have student success teams to ensure that students nail their job hunts quickly.
Strong Student Success Teams
If you’re going to find a new job, you’ll need the coaching to navigate a whole new job market. And beyond that, if you don’t land a job quickly, you need someone that can help you stay positive during your job hunt. A strong student success team from your educator can provide both.
Student success teams provide a range of training to help students enter their new fields. Generally, the basic career services that students receive include mock interviews, resume reviews, and some measure of help with creating a professional portfolio.
The networking opportunities and alumni community that each educator provides are what distinguish them. After students revise their resumes and practice their interviews, they start meeting potential employers. Many of these employers hire several graduates from the programs in question, enough to become hiring partners.
Hiring partners are companies that trust an educator to train students to a very high standard. So much so, that they keep coming back to the educator for high-quality candidates. These hiring partners sometimes have a positive influence on an educator’s curriculum, telling them what industry-standard tools their graduates need to succeed in their field of choice.
You may meet the hiring partners in a few different ways. Some bootcamps facilitate this process with speed dating-style events that put students in front of several hiring partners in rapid succession. This way, students get a chance to meet as many companies as possible to make an impression, while also learning more about what awaits them in their new field.
Of course, those students that graduate and earn jobs in the field become alumni, and an educator’s alumni network can also provide job opportunities. Even at hiring partners, it can be helpful to have someone connected with the company to make an introduction. Several alumni appreciate the chance to help people change careers as they did.
And beyond the direct hiring connections that alumni can provide, they’re also usually available to guide you during your training. You can ask someone who has been in your place not too long ago how to solve problems and navigate the challenges of a career change. Whether directly hiring graduates, or offering referrals and advice, a sustained alumni network can pay dividends for career changers.
The student success team extends beyond those that help students polish resumes and prepare for interviews. It includes companies that are rapidly hiring, and alumni that offer an inside track to jobs.
Begin Your New Career Without the Mystery
If you don’t immediately land your dream job after your ISA-funded program, it’s not the end of the world. There are several protections built into the ISA structure that give you a chance to find your footing before you start repaying. Unlike traditional student loans, you don’t have to dread immediately entering repayment after graduation no matter your financial situation.
You have help from a team of career coaches, alumni, and instructors who are happy to help you succeed. You can start repaying after you start earning a wage you know about before signing the agreement. If you lose the job that’s paying you that wage, or have to take a lower-paying job, Meratas ISAs make deferment due to financial hardship quick and easy.
If you want to learn more about what ISAs have to offer, visit Meratas’ website today.
About us: Career Karma is a platform designed to help job seekers find, research, and connect with job training programs to advance their careers. Learn about the CK publication.