FREQUENTLY ASKED QUESTIONS (FAQ)


ISA Contract Terms

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

BFF Boost ISA

  • 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.

Other Rules

  • Students with earlier versions of BFF ISAs (taken prior to July 2019) must refinance 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 rises to $2500 or above.
  • Students may refinance private student loans into a BFF ISA (more below)
  • Minimum borrowing amount: $1,000
  • 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.


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

  • Pre-tax (gross) wages, salaries, tips, and commissions earned by the Student from all employers in each tax year. (For illustrative purposes, as of the most recent tax year preceding this contract, for individual income tax filers using Internal Revenue Service (IRS) Form 1040, this value appears on Line 7.)
  • Business income. (For illustrative purposes, as of the most recent tax year preceding this contract, for individual income tax filers using Internal Revenue Service (IRS) Form 1040, this value appears on line 12.)
  • Self-employment income earned by Student. (For illustrative purposes, as of the most recent tax year preceding this contract, for individual income tax filers using Internal Revenue Service (IRS) Form 1099-MISC, this amount is equal to the sum of Lines 3 and 7.)

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.

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 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.


Refinancing

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.