Better Future Forward (BFF) has announced a new multi-state social impact ISA fund aimed at increasing college access and affordability for low-income students. The fund will provide broadly-accessible, low-risk financing through income share agreements (ISAs).
The ISA fund is a collaboration between Better Future Forward, a non-profit ISA provider, College Possible, a leading college access and success organization, and the Jack Kent Cooke Foundation (the Cooke Foundation), the country's premier scholarship organization for high-achieving students with financial need.
With a $1.1 million program-related investment from the Cooke Foundation, Better Future Forward will provide 120 College Possible students with ISA financing for tuition, fees, books, and/or living expenses. The ISA funding is designed to supplement grant-based financial aid and federal student loans, reducing students' use of private loans, credit cards, and part-time jobs to pay for their degrees.
College Possible students in Minnesota and Wisconsin attending a range of institutions are eligible to apply for Better Future Forward's impact ISA financing for the 2018-2019 academic year. Approved schools range from the University of Minnesota-Twin Cities and the University of Wisconsin-Madison to Marquette University and St. Olaf College. The ISA's terms are based on each institution's track record of helping students graduate and transition to a career. BFF does not use students' credit scores or a cosigner to underwrite ISAs, ensuring students can access the program based on their future potential - not their family's socioeconomic status.
ISAs provide students with funding for current educational pursuits in exchange for a defined percentage of their post-graduation income, for a defined period of time. There are thresholds and caps on ISA payments, and they are always income-contingent - when a graduate struggles, the ISA obligation is negligible or nothing, and when they thrive, the ISA obligation scales with their success.
After the ISA duration has ended, the graduate has no further obligation - even if they have paid back less than they originally received. Unlike loans, there is no principal to repay, interest to accrue, or fixed minimum payments required when graduates can least afford them. Importantly, by linking payments to post-graduation income, ISAs align the interests of students and the organizations helping to finance their education.
Students can learn more about BFF and College Possible's ISA program at www.betterfutureforward.org/college-possible
