Better Future Forward (BFF) announced a new income share agreement (ISA) fund for low-income Chicago students pursuing a college degree. The social impact ISA fund aims to increase Chicagoans’ access to high-quality education programs by providing low-risk, broadly-accessible, income-based college financing.
BFF’s Chicago ISA fund is in partnership with four proven, results-driven local college coaching organizations - Bottom Line, OneGoal, College Possible and One Million Degrees. The fund is launching with financial support from three philanthropic groups, including anchor investor ECMC Foundation.
Through its college coaching partners, Better Future Forward will provide 75 Chicago students with ISA financing for tuition, fees, books and/or living expenses. The ISA funding is designed to supplement grant-based financial aid and federal student loans, reducing students’ use of private loans, credit cards and part-time jobs to pay for their degrees. Unlike private loans or other restrictive forms of financing, BFF does not use students’ credit scores or a cosigner to underwrite ISAs, ensuring students can access the program based on their future potential—not their family’s socioeconomic status. Making sure funding is accessible to students of all socioeconomic backgrounds is core to BFF’s mission.
Chicago students participating in the local college coaching organizations are eligible to apply for Better Future Forward’s ISA financing for the 2018-2019 academic year. Approved schools include DePaul University, Loyola University Chicago, University of Illinois-Chicago and Northern Illinois University. The ISA’s terms are based on each institution’s track record of helping students graduate and transition to a career.
ISAs provide students with funding for current educational pursuits in exchange for a defined percentage of their post-graduation income, for a defined period of time. There are thresholds and caps on ISA payments, and they are always income-contingent – when a graduate struggles, the ISA obligation is negligible or nothing; and when they thrive, the ISA obligation scales with their success. After the ISA duration ends, the graduate has no further obligation—even if they have paid back less than they originally received. Unlike loans, there is no principal to repay, interest to accrue, or fixed minimum payments required when graduates can least afford them. Importantly, by linking payments to post-graduation income, ISAs align the interests of students and the organizations helping to finance their education.
Kevin James, CEO of Better Future Forward commented, “We are so proud to bring ISAs to Chicago students, making higher education more accessible by offering an alternative to existing financing options that constrain economic mobility and limit student success. This ISA fund not only reduces the financial barriers that students face in completing their degree, but also provides them with the benefits of mentorship and academic support through our college access partners like Bottom Line, OneGoal, College Possible and One Million Degrees.
Peter Taylor, President of ECMC Foundation added, “ECMC Foundation’s vision is to help all learners unlock their fullest potential through education. By making our first direct program-related investment in Better Future Forward’s Chicago ISA fund, we hope to improve the economic futures of Chicago students by creating a sustainable lever of socioeconomic mobility and equity for postsecondary education nationwide. We are pleased to partner with BFF and its Chicago college success partners, all of whom are current and former ECMC Foundation grantees, to give students the tools — financial and otherwise — that they need to succeed.” Mr. Taylor is also a Board Trustee of the California State University system.
Jim McCorkell, College Possible CEO and Founder, said, “College Possible was founded with the goal of making a college degree possible for every student. Our intensive coaching and support curriculum empowers low-income students with the tools and guidance they need to get into college, graduate and succeed in life. These students worked tremendously hard to prepare for their futures and we’re excited to partner with Better Future Forward to offer our students access to a financial aid model that’s as forward looking as they are. This ISA fund offers supplemental financial support to our Chicago students that is directly tied to their future success – making it easier for them to access and ultimately complete a high-quality higher education that they might not otherwise be able to afford.”
Kevin James concluded, “Student loans are far from the only issue facing higher education in America - but ISAs offer more than just another financing alternative. ISAs are a total reimagination of the way we finance postsecondary education and training, one that creates a shared destiny between students and the organization supporting them. The common economic future that ISAs create can be a lynchpin in improving educational quality, strengthening student supports, and increasing access to great programs.”
Students can learn more about the Chicago ISA program and other BFF programs at https://www.betterfutureforward.org/participate/
About Better Future Forward
Better Future Forward is a non-profit social enterprise dedicated to using Income Share Agreements (ISAs) to make high-quality postsecondary education pathways more accessible and affordable. By reforming how we pay for education, BFF is working to rebuild America’s higher education system around the principles of broad accessibility, universal affordability, and comprehensive student success. BFF develops and operates ISA programs in partnership with Lumni, an international financial technology company focused on increasing the affordability and accessibility of higher education. BFF was incubated by the Jain Family Institute, an applied research organization devoted to accelerating the progress of transformative ideas.
Learn more about BFF’s partners here: