@bubblytaco what is the income share agreement specifically? Thx.
@Knowsstuff, I got this from the Purdue website:
Students have to be full-time and meet Satisfactory Academic Progress to be eligible for the loans.
@austinmshauri. I am super tired and stuck in traffic.
So does this mean if someone borrows $10,000 they have to payback that plus $250.00=$10, 250 over a set period of time and giving 15% of their eventual income when they start to work to pay this back on a schedule?
2.5 times, not 2.5%. You could prepay your $10,000 loan by paying $25,000 back. A loan amount of $10,000 would mean an anticipated income of $66,667 (max loan is 15% of expected income).
The term and percentage of eventual income is not disclosed in the quoted material. “The sum of the percentages” is not defined in a meaningful way.
Edit: a sample contract is shown here: https://purdue.edu/backaboiler/disclosure/approval.html
All of the numbers are individualized; there’s absolutely no way to opine as to whether this is a “good deal” without knowing the specifics, and Purdue does not disclose even possible ranges of specifics.
Got it!!! Told you I was tired… Lol… I personally like my deal better that I proposed. ;).
I called University of Michigan where my son goes and they don’t have this.
I know of the Stanford loan for teachers that if you work in a needed area they will take off up to $17,500 of your payments.
Just can’t figure out if this is a good deal or not. Thx for the explanation. @allyphoe
So what are you guys saying about Purdue is it not a good deal?
We’re saying we don’t know whether the ISA is a good deal without knowing the specifics of it.
I do agree with everyone else’s comments that borrowing for Purdue (and the ISA, despite the giant letters saying THIS IS NOT A LOAN, looks a lot like borrowing) for a teaching degree seems unwise when you have Illinois State and Marquette for less.
They mentioned that it would be about 5% of income though without interest.
This is a loan and the details about it aren’t clear. The terms can differ from one borrower to another, and even from year to year for the same borrower. No, I wouldn’t finance an education this way. Do you have any options that you can afford with just the federal student loan? What’s your budget?
It is not a federal loan it is a Purdue agreement.
Can you guys let me know if you here anything about the isa
The Purdue agreement is a loan too. I don’t think it’s worth taking.
What other schools accepted you? How much do they cost? Can your parents afford any of them?
North Central, IL State, Marquette
I think sharing your income is a horrendously bad idea. Especially when you have two perfectly wonderful options for your ambitions already in hand and neither will require this level of long term commitment/financial ramifications for you as a young teacher.
If you can afford 5% of you salary for a number of years, that could easily be funded into your own retirement account. I don’t care what the salary amount is or isn’t. And if it’s a small starting salary you may be hard pressed to come up with the money. Also I assume the payback is with after tax dollars. Meaning it would cost you much more than putting it away for yourself over the life of the contract.
If you do this in the early years the prospect of those dollars compounding for 40 years is astronomical. It’s not 2.5 times what you’ve borrowed, it’s an astounding number.
Marquette for teaching and all around experience is great. ISU for a pure teaching path appears to top flight as well. Per the posters above who have more direct knowledge of the school than I.
Good luck!
Thank you for your honesty @privatebanker very much appreciated. What are your thought about North Central?
I just don’t know tbh.
To you all thank you for providing very helpful feedback. I am new to the college process.
Recently accepted into ohio state
Awesome @bubblytaco ! Congrats. Another great choice. Hopefully cost will be good too!