An Income Share Agreement (ISA) is a financing arrangement where a student agrees to pay a percentage of their future income for a set period after completing a program, instead of paying tuition upfront. Unlike a traditional loan, the amount repaid depends on your earnings rather than a fixed loan balance.
Here's how an ISA typically works:
- You attend a bootcamp with little or no upfront tuition.
- After graduating (and often after finding a job that pays above a minimum income threshold), you pay a fixed percentage of your income—for example, 5–15%.
- Payments continue for a set duration (such as 2–5 years) or until you reach a maximum repayment cap.
- If your income stays below the threshold, you may owe nothing during that period, depending on the agreement.
Potential advantages
- Lower upfront cost. You can enroll without paying full tuition immediately.
- Some protection if your income is low. Many ISAs suspend payments when your earnings fall below a specified threshold.
- Aligned incentives. In theory, the bootcamp benefits when graduates obtain higher-paying jobs, giving it an incentive to provide strong career support.
Potential disadvantages
- You may repay much more than the tuition. If you land a high-paying job quickly, total payments can significantly exceed the original cost.
- Terms can be complex. Income thresholds, payment percentages, caps, exclusions, and definitions of "income" vary widely.
- Not always cheaper than alternatives. Depending on your career outcome, a conventional loan or paying upfront could cost less.
- Career uncertainty. If you leave the field or experience irregular income, the agreement's rules may become complicated.
Are ISAs a good idea for bootcamps?
It depends on several factors:
An ISA may be worth considering if:
- The bootcamp has strong, independently verified job placement and salary outcomes.
- The repayment cap is reasonable and clearly disclosed.
- You have limited access to lower-cost financing.
- You're comfortable with the possibility of paying more if your career goes very well.
An ISA may be less attractive if:
- The bootcamp's employment outcomes are weak or difficult to verify.
- The ISA lacks a repayment cap or has a very high one.
- You qualify for a low-interest loan or can pay tuition without borrowing.
- You're entering a field with uncertain or highly variable income.
Questions to ask before signing
- What percentage of income will I pay?
- What is the minimum income threshold before payments begin?
- Is there a maximum total repayment?
- How long does the payment obligation last?
- How is "income" defined?
- What happens if I'm unemployed, self-employed, or move abroad?
- Are there fees or penalties?
- Can I prepay, and if so, under what terms?
The current landscape
ISAs became popular among coding bootcamps in the late 2010s, but many schools have since shifted back toward traditional financing options due to regulatory scrutiny and changes in the education financing market. While some programs still offer ISAs, they're less common than they once were.
The key is to compare the expected total cost of the ISA against other payment options under different salary scenarios. If you'd like, I can also walk through a numerical example (for example, comparing a $15,000 bootcamp paid via an ISA versus a student loan) to show how the costs can differ.
