Income Share Agreements: What to Know
What an income share agreement is, why federal regulators treat it as a loan, and the questions to ask before you sign one for a training program.
Some bootcamps and training programs offer a deal with no tuition up front. You sign an income share agreement (ISA) and pay a share of your income after you finish. It can sound like a way to train without debt. Federal regulators say it is a loan.
What an ISA is
The Consumer Financial Protection Bureau (CFPB) puts it this way: “Income share agreements, also known as ISAs, are a type of credit product or private student loan.” You get money for your education in advance. In exchange, “you generally promise to make payments based on a percentage of your income” until you repay a set amount or a set period ends.
The same CFPB page (last reviewed May 14, 2024) adds:
- Your payments rise and fall with your income. If you earn more, you may pay more each month until you reach the agreed maximum, the “payment cap,” or the end of the repayment period.
- “If your income is below a certain threshold, you may not owe anything each month.”
- “Terms and conditions of income share agreements may vary.” The share of income you owe may depend on your program.
- Each new ISA takes another slice: “you are committing an additional percentage of your income with each new agreement.”
Regulators treat ISAs as loans
Several federal cases involved ISAs sold by schools and training programs:
- Better Future Forward, 2021. The CFPB found that the company “falsely represented that its ISAs are not loans and do not create debt.” Then-Acting Director Dave Uejio said: “regardless of the name on the label, these products are credit and have to comply with federal consumer protections.”
- Prehired, 2023. The CFPB and 11 states acted against a company that ran “a 12-week online training program.” Its marketing “falsely claimed that its loans did not create a debt.” Prehired is now “permanently banned from offering income share loans in the future.”
- Sollers College, 2023. The Federal Trade Commission (FTC) said the school’s ISAs “failed to include the Holder Rule notice.” The FTC’s consumer protection director added: “Today’s order cancels all income-share agreements issued by the school.”
- BloomTech, 2024. According to the CFPB, students “who earn more than $50,000 in a related field” had to pay 17% of their pre-tax income each month. Payments stopped after 24 payments or a $30,000 cap. The CFPB said: “In fact, the agreements are loans with an average finance charge of $4,000.”
The CFPB’s latest report still groups ISAs with private student loans. Its January 2026 Private Education Loan Ombudsman report says these loans “may include various structures or financing arrangements such as Income Share Agreements and Tuition Assistance Programs.”
Why the label matters
Calling an ISA a loan changes what you are owed.
- Loan disclosures. The 2021 order required Better Future Forward to give “disclosures about the finance charge, the amount financed, and the annual percentage rate.” You can ask any ISA provider for the same numbers.
- No prepayment penalty. The CFPB found that Better Future Forward “imposed unlawful prepayment penalties on its private education loans.”
- Fewer protections than federal loans. “Private student loans, including products like income share agreements, do not offer the same protections” as federal student loans, the CFPB says. Its advice is to use federal student loans (if available) and options “such as scholarships and grants” first.
- Your rights if the contract is sold. The FTC’s Holder Rule “preserves consumers’ right to assert the same legal claims and defenses against anyone who purchases the credit contract.” This matters because ISAs can be sold. The CFPB said BloomTech “was selling many “income share” loans to investors.”
How the terms work together: a hypothetical
Four terms drive what you pay: the income share, the payment cap, the income threshold and the term. The example below is made up, with round numbers. It is not from any real contract.
Say a program costs $10,000. The ISA takes 10% of your pre-tax income for up to 48 monthly payments. You only pay in months when your income is above $40,000 a year. Total payments are capped at $20,000.
| Your salary | Monthly payment | What happens |
|---|---|---|
| $60,000 | $500 | You hit the $20,000 cap after 40 payments. You pay twice the price. |
| $45,000 | $375 | You make all 48 payments, $18,000 in total. |
| $35,000 | $0 | You are below the threshold. Does this month count toward the 48? |
In this example, the highest earner pays the most, up to double the price. A lower earner may pay less. The contract terms decide which.
Questions to ask before you sign
Payment cap
- What is the most I could pay in total? How does that compare with the tuition?
Income threshold
- How much must I earn before payments start? Is that pre-tax income?
- What counts as income: salary only, or bonuses and freelance work too?
Term
- How many payments, or how many years?
- Do months below the threshold count toward the term, or push the end date back? Is there a final date when the ISA ends no matter what?
Leaving the field
- Does the ISA apply to any job, or only to jobs “in a related field,” as BloomTech’s did? Who decides what counts?
- What happens if I take a job outside the field, work part time or stop working?
Costs and fine print
- Will you give me the finance charge, amount financed and APR in writing?
- Can I pay it off early without a penalty?
- What happens if I miss a payment? At BloomTech, the CFPB said, “a single missed payment triggers a default and the remainder of the $30,000 “cap” becomes due immediately.”
- Can you sell my contract? Does it include the Holder Rule notice?
- If there is a dispute, where would a lawsuit be filed? An affiliate of Prehired, the CFPB said, filed debt collection lawsuits “in a jurisdiction far away from where the consumers lived.”
If something goes wrong
You can submit a complaint to the CFPB. Its ombudsman report lists “Issue with income share agreement” as one of the complaint categories for student loans.
The short version
- The CFPB treats an ISA as a private student loan, whatever the provider calls it.
- Check grants, scholarships and employer help first.
- Compare the payment cap with the tuition.
- Get the APR, finance charge and amount financed in writing.
- Know what happens if you earn less, leave the field or miss a payment.
- Read the full contract before you sign. Our checklist for online certificates covers the rest.
