ISAs provide students with financial resources to cover their education costs in exchange for a portion of their income as soon as they start working. Under a standard contract, beneficiaries agree to pay a fixed percentage of their income for a specified period of time, within an agreed cap. For example, a student who has covered $10,000 of their education through an ISA may agree to repay 5 per cent of their monthly income for the next 120 months (10 years) up to a maximum of $20,000. ISAs also generally have a minimum income threshold before payments come into effect; If the beneficiary earns less than the minimum, he pays nothing. This means that ISAs offer students more downward protection than a traditional loan. Scholarships and other needs-based aids reduce some of the costs of higher education, but the majority of young adults who attend university end up borrowing. Over the past two decades, the total number of outstanding student debt in the country has steadily increased and, adjusted for inflation, has almost five-fold to reach more than a trillion dollars. (See diagram.) An Income Participation Agreement (ISA) in post-secondary education is a contract in which students commit to paying a certain percentage of their future income over a period of time in exchange for spending on current education programs. As a general rule, participants begin making payments as soon as their income exceeds a minimum threshold set by ISA conditions and never pay more than a fixed cap (usually a multiple of the initial amount). FUNDING for ISAs can range from academic sources to philanthropic funding and private equity. In this study, we describe the many multiple and often complex incarnations of ISA contracts, as well as their many cases of application in traditional university programs, non-graduation/certificate programs and staff recruitment. First, we discuss the current state of the ISA market, including isA structuring and funding, how educational programs plan to provide students with ISAs, and what factors they may weigh during the design and implementation phase of the ISA.

Second, we discuss the pros and cons of different important aspects of an ISA (example. B funding model, payment terms) for students, institutions and, if applicable, investors. Finally, we discuss the theoretical basis of ISAs and the main practical challenges to which institutions that offer ISAs, students who select these contracts and regulators promote themselves as isAs in the short and long term. While ISA supporters want them to be more widespread in funding education, there are a few factors they can maintain a niche option, at least for now.