Stride Funding: Income Share Agreement Review

Stride Funding offers income share agreements to students who are at least college juniors and typically major in health care and STEM fields.

Ryan LaneApril 21, 2020

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Our Take

4.5

NerdWallet rating 

The bottom line: Stride Funding offers income share agreements, primarily to health care and STEM students at most schools eligible for Title IV federal aid. Stride is a good option if you’ll pay less overall with an ISA than other education financing options, or if you can’t qualify for a credit-based private student loan.

Stride Funding Income Share Agreement
Check Rate

on Stride's website

Min. Credit Score

None

Pros & Cons

Pros

  • Payments aren’t due if you’re unemployed.

  • Lending decisions are not based on your credit score.

  • You receive free career services, including job placement support.

Cons

  • There’s no discount for paying off your agreement early like some lenders offer.

  • Funding may not be available based on your school or major.

  • Not available in South Carolina.

Compare to Other Lenders

Stride Funding Income Share Agreement
Sallie Mae Private Student Loan
Ascent Private Student Loan
Check RateCheck RateCheck Rate
Fixed APR

N/A

Fixed APR

4.25 - 12.35%

Fixed APR

3.53 - 14.50%

Variable APR

N/A

Variable APR

1.25 - 11.15%

Lowest rates shown include the auto debit discount: Fixed 4.25% - 12.35% APR and Variable 1.25% - 11.15% APR. Interest rates for Fixed and Deferred Repayment Options are higher than interest rates for the Interest Repayment Option. You're charged interest starting at disbursement, while in school, during your separation/grace period, and until the loan is paid in full. The repayment option that is selected will apply during the in-school and separation/grace periods. When you enter principal and interest repayment, Unpaid Interest will be added to your loan's Current Principal. Variable rates may increase over the life of the loan. Advertised variable rates reflect the starting range of rates and may vary outside of that range over the life of the loan. Advertised APRs are valid as of 06/25/2020. and assume a $10,000 loan to a freshman with no other Sallie Mae loans. Additional information regarding the auto debit discount: Borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month and may be suspended during periods of forbearance or deferment, if available for the loan. Loan amounts: $1000 up to 100% of the school certified expenses: Loan amount cannot exceed the cost of attendance less financial aid received as certified by the school. Sallie Mae reserves the right to approve a lower loan amount than the school-certified amount. Repayment term of 5 to 15 years: This repayment example is based on a typical Smart Option Student Loan made to a freshman borrower who chooses a fixed rate and the Fixed Repayment Option for a $10,000 loan, with two disbursements, and a 8.51% fixed APR. It works out to 51 payments of $25.00, 179 payments of $124.69 and one payment of $66.91, for a Total Loan Cost of $23,661.42.

Variable APR

2.71 - 12.99%

Ascent Student Loans are funded by Richland State Bank (RSB), Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentStudentLoans.com/Ts&Cs. Rates are effective as of 09/01/2020 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 2.00% (for undergraduate future income-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentStudentLoans.com/Rates . 1% Cash Back Graduation Reward subject to terms and conditions. Click here for details. Cosigned Credit-Based Loan student borrowers must have a minimum credit score. The minimum score required is subject to change and may depend on the credit score of your cosigner.

Min. Credit Score

None

Min. Credit Score

Does not disclose

Min. Credit Score

Mid-500s

Full Review

Stride Funding began offering income share agreements, or ISAs, in 2019 under the name AlmaPact. Like traditional student loans, ISAs offer upfront funding for your education. But ISA payments are based on your income, not an interest rate.

Most ISAs are offered by individual colleges. Stride stands out because you can receive funding at most schools — but primarily for STEM and health care majors. Graduate students are preferred, though you can qualify as a college junior or senior.

Stride caps payments at two times the amount borrowed. For example, if you receive $25,000, you could repay up to $50,000. That limit is lower than some other private ISAs, but you could pay even less: Stride anticipates that fewer than 5% of students will hit their payment cap.

A Stride ISA can make sense if you expect it to be less expensive than PLUS loans, private loans or your college’s own ISA, or if you can’t qualify for those options. Always max out subsidized or unsubsidized federal loans before turning to any of these alternatives.

Stride Funding Income Share Agreements at a Glance

  • Income shares typically range from 2% to 9.5% of your gross income.

  • Payments aren’t due if you earn less than $30,000 or $40,000, depending on the ISA.

  • Payments capped at two times the amount borrowed.

How Stride Funding could improve

  • Offer a discount for paying off your ISA contract early.

  • Count qualified periods of unemployment toward your repayment term.

  • Increase transparency on its website, such as providing a sample contract.

Estimate the cost of an income share agreement

Stride Funding income share agreement details

  • Income share rates: Typically, 6% to 9% per contract; Lifetime maximum: 20%.

  • Soft credit check to qualify: Yes; while your agreement won’t be based on your credit score, you could be disqualified due to negative credit history like a previous loan default.

  • Repayment term: 5 years, but can extend to 10 years via deferment.

  • Amounts: $5,000 to $25,000, annually. Lifetime maximum: $50,000.

  • Payment cap: Two times amount borrowed.

  • Application or origination fee: No.

  • Prepayment discount: No.

  • Late fees: Yes; $10 if you do not make a payment on or before 10 days after the due date.

Compare Stride Funding’s costs with those for other financing options, like private student loans. To see what ISA terms Stride Funding will offer you, apply on its website.

FINANCIAL

  • Minimum credit score: Non-credit based, but negative credit marks, such as previous loan defaults, will disqualify you.

  • Minimum projected post-graduation income: No minimum, but typically $50,000.

  • Average post-graduation income of approved borrowers: $80,000.

  • Maximum debt-to-income ratio: Varies by educational program.

  • Can qualify if you’ve filed for bankruptcy: Yes, after seven years.

OTHER

  • Citizenship: Must be a U.S. citizen or permanent resident.

  • Location: Not available in South Carolina.

  • Must be enrolled half-time or more: Yes.

  • Types of schools served: Borrowers must be enrolled in a degree-granting program at an eligible school.

  • College level: Graduate programs, particularly those in STEM and health care disciplines, are preferred. You may still qualify if you’re getting a master’s in a different major, if you’re a college junior or senior or if you already have a bachelor’s degree.

IN-SCHOOL REPAYMENT OPTIONS:

  • Deferred: No payments required while you’re in school.

POST-SCHOOL REPAYMENT OPTIONS

  • Grace period: 3 months.

  • Salary floor: Generally $30,000 or $40,000. Payments aren’t required when you earn below this amount. Periods of non-payment extend your repayment term at a 1-to-1 ratio, up to five additional years.

  • Unemployment deferment: Payments aren’t required during periods of unemployment. Deferment extends repayment at a 1-to-1 ratio, up to five additional years.

  • In-school deferment: Yes.

  • Military deferment: Yes.

  • Forbearance: You can request a six-month deferment due to economic hardship. Deferments will be considered on a case-by-case basis and will require documentation.

  • Death or disability discharge: Yes.

REPAYMENT PREFERENCES

  • Reports payments to credit bureaus: TransUnion only.

  • Servicer: MOHELA.

  • In-house customer service team: Yes.

  • Process for escalating concerns: Yes.

  • Borrowers get assigned a dedicated banker, advisor or representative: No.

  • Average time from application to approval: Two to three days.

  • Career services: You can receive resume services, job placement support and mentorship.

How to apply for a Stride Funding income share agreement

Before taking out a Stride Funding ISA, or any other type of private student debt, exhaust your federal student loan options first. Submit the Free Application for Federal Student Aid, known as the FAFSA, to apply.

Compare your projected costs under an ISA to private student loan options to make sure you’re getting the best deal possible. In addition to how much you’ll repay, look at a lender's repayment alternatives and the flexibility it offers to borrowers who struggle to make payments.

STUDENT LOANS RATINGS METHODOLOGY

An income share agreement is not a student loan, but borrowers may choose between the two. NerdWallet believes the best education lending product is one that costs you the least. That’s why NerdWallet’s ratings reward lenders that offer favorable loan terms, limit fees and penalties, and extend borrowers multiple options to avoid default. Points are also awarded for soft credit checks, underwriting transparency and other consumer-friendly features. Use these ratings as a guide, but we encourage you to shop around for the best deal you can qualify for. NerdWallet does not receive compensation for its reviews. Read our editorial guidelines.