ELEMENTS OF AN ISA CONTRACT

While an ISA is not a loan, it is a financial obligation. When you sign an ISA contract, you are promising to pay a percentage (share) of your future income for a set number of months.

As part of the application process, you will receive a contract proposal. Review the elements in your contract proposal to understand what your obligation will be. As a preview, you can generate contract terms by using the calculator for your ISA program.


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PERCENTAGE OF INCOME (INCOME SHARE)

Each ISA contract has a unique percentage rate (income share), based on your requested funding amount, school, grade level, and program.

The percentage is the amount of your post-school income that you pay to fulfill your obligation. The percentage is not an interest rate; it’s a slice of income, similar to a small income tax.

 
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Payment Period

Each ISA contract also has a specific payment period, or number of payment months. BFF offers contracts of two lengths: either 96 or 144 months (equivalent to 8 or 12 years).

Your ISA obligation is to make the number of payments specified on your contract. Your obligation ends when you finish the number of payments—regardless of the total amount you’ve paid. You are not obligated to pay back a principal amount as you would with a loan.

 
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MINIMUM THRESHOLD

To protect those experiencing financial hardship, each ISA contract has a minimum threshold (indexed to inflation). Payments pause when your annual income is below the threshold and start up again when your annual income rises above the threshold.

 
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Term Extensions—5 Years MAx

If you must pause payments for a year or more due to financial hardship, your contract length will extend by an equal number of years—but only up to five years beyond your original term.

 
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ANNUAL AND TOTAL CAPS

Annual and total payment amounts are capped so that participants earning the highest incomes will be protected from paying excessive amounts.

 

Learning Center

About ISAs

Elements of an ISA Contract

Sample Legal Documents