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ISA PRODUCTS

BFF’s income share agreements, or ISAs, can help students cover the net price of college.

ISAs are similar to loans because they are contractual obligations. With BFF’s contracts, however, the payments and protections work differently: Instead of promising to pay back a principal loan amount plus interest after you leave school, you promise to pay back a set percentage of your monthly income. You pay until you reach the maximum total payment amount or until the term expires—whichever comes first.

 
Boost ISA
Borrow from
$1,000 to $2,499
Monthly Payments
  • 3.5% of your earned income (after college) —
    but only when you're earning over $30,000.

Protections:
  • You'll never pay more than what you borrowed at a 7% annualized rate, but you could pay less.
  • You'll never pay for more than 240 months, but you could pay for less time than that — and prepay at any time.
Note: The minimum amount for existing BFF borrowers seeking additional financing is $250. New borrowers must take a minimum of $1000.
Opportunity ISA
Borrow from
$2,500 to $35,000
Monthly Payments
  • 3.5%–10% of your earned income (after college) —
    but only when you're earning over $30,000
See full pricing table

Protections:
  • You'll never pay more than 1.1x of what you borrowed at a 4.5% annualized rate, but you could pay less.
  • You'll never pay for more than 240 months, but you could pay for less time than that — and prepay at any time.

 
EXAMPLES
A student needs $10,000 to complete her junior year of school, so she takes an Opportunity ISA . Her payments depend on her after-school earnings. For example:
If she earns...
$25,000 She pays nothing and finishes her BFF ISA in 240 months.
$35,000 She pays $14,417 and finishes her BFF ISA in 91 months.
$45,000 She pays $13,858 and finishes her BFF ISA in 70 months.
Under other options...
  • She pays $13,947 with a federal unsubsidized Stafford loan
  • Her parents pay $17,070 with a Parent PLUS loan
  • She pays $17,892 with a private student loan at a 8.5% annualized rate
A student needs $1200 to complete his senior year of school, so he takes a Boost ISA . His payments depend on his after-school earnings. For example:
If he earns...
$25,000 He pays nothing and finishes her BFF ISA in 240 months.
$35,000 He pays $1,364 and finishes her BFF ISA in 14 months.
$45,000 He pays $1,352 and finishes her BFF ISA in 11 months.
Under other options...
  • He pays $1,605 with a federal unsubsidized Stafford loan
  • His parents pay $1,924 with a Parent PLUS loan
  • He pays $1,995 with a private student loan at a 8.5% annualized rate
Calculation notes: Assumes 2.5 percent annual income growth. For loan comparisons, assumes a 10-year term length in all cases, which is the default term length for federal loans and the average term length for a Sallie Mae private student loan. Federal loans offer other repayment options, including income-driven repayment options, that can result in higher or lower payments depending on your circumstances. Private Student Loan rates are based on the average fixed interest rates under the Sallie Mae Bank Private Education Smart Option Student Loan, as of August 3, 2019. The interest rate on a private education loan will vary based on your credit score.


Making the Right Decision

We encourage you to read more about ISAs to decide whether they’re right for you. Here are a few articles to explore:

What to Ask Yourself Before Using an ISA to Pay for College (via NerdWallet)

Income Share Agreements (Savingforcollege.com)

 

 

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