ISA Contract Terms

What are BFF’s new terms for the 2019-20 academic year?


  • For those with need between $1000 and $2499
  • You pay 3.5% of your income each month, but only when you're earning over $30,000.
  • You pay this income share until:
    • Cap on payments: You never pay more than what you borrowed, accruing interest at a 7% rate.
    • Time limit: You never pay for more than 240 months, even if you've paid less than your borrowed amount.

BFF Opportunity ISA

  • For those with need above $2500
  • You pay between 3.5-10.0% of your income each month (depending on the amount of money you need), but only when earning over $30,000.
  • You pay this income share until:
    • Cap on payments: You never pay more than 1.1x of what you borrowed, accruing interest at a 4.5% interest rate.
    • Time limit: You never pay for more than 240 months, even if you've paid less than your borrowed amount.

Note: The minimum borrowing amount for existing BFF borrowers seeking additional financing is $250. New borrowers must take a minimum of $1000.

Other Rules

  • Students with earlier versions of BFF ISAs (taken prior to July 2019) must refinance those into BFF's new terms in order to take additional financing from BFF.
  • Students with one or more Boost ISAs must refinance them into an Opportunity ISA if their overall borrowing need from BFF rises to $2500 or above at any point.
  • Students may refinance private student loans into a BFF ISA (more below)
  • Minimum borrowing amount: $1,000 ($250 for students who are existing borrowers with BFF)
  • Maximum annual (academic year) borrowing amount: $12,500
  • Maximum borrowing amount: $25,000 (generally), $35,000 (with appeal); subject to affordability guidelines for students with other student debt or ISAs

Is there a fee for applying?

There are no fees for applying for a BFF ISA.

How much money am I allowed to take through this program?

You can take up to $25,000 in total and no more than $12,500 in a single academic year. However, in special circumstances we may waive these limits to allow up to $35,000 in total if you conduct a financial aid review with one of our advisors.

Furthermore, you cannot take more than your cost of attendance at your institution minus any other financial aid awards you have received.

If you have existing student debt, particularly private student loans, this may limit the amount of money you can receive relative to the amounts above. In this case, you should consider refinancing your private student loan(s) into a BFF ISA.

There is a $1000 minimum amount required for any BFF ISA application.

Will students be required to go into or be steered toward certain types of employment?

No, there are no requirements stipulating the nature or type of employment or re-enrollment in school that you can choose after you leave the institution.

Using and Receiving ISA Funding

Can I use money from a BFF ISA for expenses beyond tuition and fees?

Yes, you can use a BFF ISA to cover supplies and other living expenses associated with your education up to your cost of attendance.

Can I use a BFF ISA to cover an unpaid balance with my school?

You may use funds for past due balances if not more than 365 days have passed from the last day of the term where you were last enrolled to the first day of classes for the term for which you are applying for funding. You must enroll for the term and otherwise meet the eligibility requirements.

How is BFF ISA funding disbursed?

BFF will disburse funding directly to your institution. Any amounts beyond your tuition and fees will be refunded to you through your institution in accordance with the institution’s policies.

Making Payments

How are ISA payments calculated?

Payments are calculated by applying your income share to your monthly income. For example, let’s say a student has an ISA with an income share of 2.85 percent for 60 months, and this student gets a job earning $48,000 per year. A student’s payments would be calculated using these steps:

  • Calculate monthly income by dividing annual income by 12: $48,000/12 = $4,000
  • Calculate monthly payment by multiplying the monthly income times the agreed upon income share: $4,000 x 2.85 percent = $114/month.

As the student’s income changes, payments will always be calculated using the same formula.

How is my income determined for the purposes of my payment obligation?

Your payment obligation is calculated based on your individual earned income, which is defined as the sum of:

  • Wages, salaries, tips, commissions and other employee compensation you earn from all employers in the taxable year. (For illustrative purposes, if you are using the IRS Form 1040, this value appears on Line 1.)
  • the amount of your net earnings from self-employment for the taxable year. The term "net earnings from self-employment" means the gross income you derive from any trade or business you carry out, less the expenses attributable to such trade or business, plus your distributive share (whether or not distributed), from any trade or business carried on by any partnership of which you are a member. (For illustrative purposes, if you are using the IRS 1040 form, this would include portions of the amounts included on Schedule 1, lines 12, 17, and 18. Specifically, it would equal the total of the amount on line 31 of any Schedule C with a "Yes" on Line G, the amount on line 34 of any Schedule F with a "Yes" on Line E, and the sum of columns (i), (j), and (k) of line 29a of any Schedule E.)

Unemployment benefits you receive are not considered part of the your individual earned income. It also excludes income earned by a spouse.

How does the threshold work? Is it calculated based on my monthly or annual income?

During your payment term, if your monthly income is below $2500 (equivalent to $30,000 annual income), adjusted each year for inflation, you will have no payment obligation for that month. However, you still receive credit for that month toward your payment term even though your payment obligation is zero.

Is there a grace period for BFF’s ISAs?

Yes, there is a six-month grace period before your payment term begins. However, if you are not earning above the threshold after the grace period ends, your payment term will still start but your monthly payments will still be zero until you begin earning above the threshold amount.

Is there a forbearance option if my monthly payment becomes unaffordable?

Yes. You can take up to 12 months of forbearance (continuously or separately) during your payment term, but not more than three months at any given point. During a forbearance, your payment obligation will be suspended. You won’t receive credit toward your payment term for any months where you are in forbearance.

Do I have to submit my tax return at the end of the year?

You will be required to submit a copy of your tax return each year and, additionally, sign a form allowing us to receive a copy of your tax transcripts from the Internal Revenue Service (IRS). This provides us with an independent source of verification for the income you’ve earned in the calendar year.

We may also require a reconciliation at the end of the year if the payments you made were higher or lower than the amount you would owe for the year using your annual income. If your payments during the year were higher than what you would owe based on your annual income, we will credit those overpayments toward future payments. If your payments were lower than what you would owe based on your annual income, the difference will be added to your monthly payment obligation in the following calendar year.

If you had periods of forbearance or other months that weren’t covered by your payment term, we will subtract that income from the annual income on your tax return, and in doing so we will assume that your income was earned evenly throughout the year. If you believe this does not accurately represent how your income was earned, you can appeal this calculation by providing documentation showing your income level during the months not covered by your payment term.

Can I pay off my ISA early?

You can complete your obligation at any time by paying the payment cap, minus any payments you’ve already made.


How does private student loan refinancing work?

You can refinance existing private student loans so long as you continue to be enrolled in an eligible institution. If you apply to refinance one or more private student loans, and you are approved for BFF ISA funding, BFF will make a payment to your existing lender(s) to extinguish your private student loan obligation(s). Those amounts will then be converted to a BFF ISA obligation as if you had taken that money directly from the program. Amounts you use for private loan refinancing will also be included when considering your aggregate borrowing limits for BFF’s ISAs.

Risks and Penalties

If I earn a high income, do I risk paying more than other students or more than I would for a loan?

You will never pay more than the amount you borrowed at a 7% annualized rate (for the Boost ISA) or 1.1x of what you received at a 4.5% annualized rate (for the Opportunity ISA). However, if your after-school earnings are lower, you could pay less than these amounts or even nothing.

Is it possible to default on this obligation? What are the risks?

Yes. If you fail to communicate your annual income or experience difficulty making payments, then your account may become delinquent and eventually go into default. This can be avoided by maintaining communication and complying with the terms of your ISA contract.

What are the tax implications of an ISA?

The federal, state and local income tax consequences of ISAs are not yet certain. Upon the maturity or termination of an ISA, if the aggregate amount of funding credited to your account is greater than the sum of payments you made during the payment obligation, you may need to recognize the difference as ordinary income. We recommend you consult with a trusted advisor about the consequences of entering an ISA.

What happens if I don’t graduate on time or at all?

BFF's ISAs enter a grace period upon graduation, withdrawal, or when a student stops enrollment (aside from non-standard semesters such as the summer). Even if you don’t finish your degree or program, you are responsible for meeting the terms of your ISA contract.