New Study: Perceptions and Characteristics of ISA recipients

by Kevin James

We use income share agreements (ISAs) to help our students access higher education and complete a degree or credential that will set them up well in their career. As part of that work, it’s critical to understand and learn from the experiences of others who are using similar tools to support students.

In that spirit, we were excited to be able to support a study conducted by Maria Claudia Soler Salazar, a recent Ph.D. graduate from the University of Illinois, Urbana-Champaign, focused on the characteristics and perceptions of students who took ISAs. (This work was also generously supported by Lumina Foundation and the Jain Family Institute.)

The study was conducted in partnership with Lumni, an ISA provider based in Latin America, and was based on a survey of Lumni students in Colombia and Peru, some who took an ISA and some who were offered an ISA but did not take it.

Some of the key findings were:

  • Thirty-seven percent of the ISA takers in the survey said they would not have been able to use other resources to re-enroll in college absent the ISA. This aligns with BFF’s experience that ISAs can help address financial challenges for many students that would otherwise force them to drop out of their education.

  • Students who took ISAs were more confident in their future salaries but performed worse academically. The lower academic performance of those who choose ISAs is some evidence that adverse selection might be a challenge with ISAs.

  • ISA takers are from lower income households (at the time they applied) than those who opted against taking ISAs. This finding may be a result of the fact that students from lower-income households simply have greater financial need or that they are more sensitive to the risks of loans (if they have fewer family resources to help them if they’re unable to pay their loans).

  • There was no significant difference in attitudes toward risk between those who opted for ISAs versus those who didn't. Instead, the decision to take an ISA or not appeared heavily influenced by whether a student perceived ISAs or loans to be riskier. Over three-quarters of ISA takers considered loans riskier than ISAs. In contrast, 57.5% of students who opted against taking an ISA perceived ISAs to be riskier than loans.

If you’d like to read more, the full paper is available on SSRN, and if you’d like to reach out to Dr. Soler, you can email her at

Disclaimer: The views expressed in this publication are those of the authors and do not necessarily represent those of Lumina Foundation, its officers or employees.

Kevin James