An Income Share Agreement Helps A Flight Attendant Enter the Digital Cloud

After nearly five years of flying above the clouds, Evan Kolb found himself entering a different kind of cloud—the digital one. 

Upon earning a bachelor’s degree in East Asian Languages and Cultures, Evan landed a job as a flight attendant aboard US-China passenger flights. “Because of my major, I learned how to speak Mandarin, so I did Chinese translation on those flights… I met a lot of software engineers and project managers on my flights to China and had some pretty interesting conversations in the back galley,” Evan said. The conversations jogged Evan’s previous fascination with tech. 

“I have always been curious about coding. I took an introductory class to computer science at the university, and it was really fun back then. I think the reason why I didn’t pursue it was because I didn’t think I had the time to do so especially with my major.” 

After talking with software engineers on US-China flights, Evan finally decided to pursue a job in the field. He started small, teaching himself how to code in Python, and using his skills to build productivity tools for his work.

“It was a lot of fun, but it didn’t really have much use outside of my job. I knew that I really needed to get into JavaScript and into web development if I wanted to expand upon what I’d already learned and make it into a career.”

In the summer of 2020, Evan finally had the chance to make the switch. “My wife gave me the green light to give coding a shot. She said she was willing to support us financially while I went to school. So, I took that as an opportunity to start looking around for schools and start applying.”

Shortly after, Evan enrolled in Galvanize’s Hack Reactor Software Engineering Immersive. In a matter of 12 weeks, he went from a bilingual flight attendant to a multilingual programmer. 

Roaming the Skies: Choosing a Coding Bootcamp

“If I was going to spend the time and money to attend a program, I wanted to make sure that it wasn’t just an afterthought. I wanted to know that [the program] will offer the same quality as a brick-and-mortar school,” said Evan.

For him, the Hack Reactor program fit that bill for three reasons. First, the program matched his learning needs and standards. “I got the sense that Hack Reactor holds its students to high academic standards, and that was what I needed to see… [The program] was rooted in JavaScript and so the basis for everything going forward was also something that fit my needs.”

Second, the bootcamp offers a tried-and-tested remote learning setup. “[Galvanize’s Hack Reactor] seemed to have a longer history of doing remote programs compared to other schools that only started teaching remotely because of the pandemic,” Evan said. “With [the bootcamp], it has long been up and running so that gave me a lot of faith in applying.”

Lastly, the Hack Reactor program came with an affordable financing option: the income share agreement (ISA) loan. “Without the ISA, I think somebody in my position could have taken a [traditional] loan,” said Evan. “However, coming from a traditional four-year background, I already have student loans that I had to consider.”

“There are a lot of people that wouldn’t want to take on more [traditional student loan] debt, and there are a lot of people whose credit history wouldn’t even allow a loan to be a possibility,” he said. “Fortunately, the bootcamp had a really generous ISA.”

The “Really Generous” ISA

In 2019, Galvanize revamped its financing options with a new addition to its menu: the income share agreement loan. The move aligns with the coding bootcamp’s goal of increasing upskilling opportunities for aspiring tech professionals. 

By allowing students to enroll without upfront payment, the bootcamp made itself more accessible to people who want to break into tech. A year later and amid a pandemic, Galvanize took that mission a step further as it introduced what it called the “most student-friendly ISA.”  

An income share agreement is a type of loan that provides participants with upfront education funding in exchange for a fixed percentage of their future gross monthly income. Until they find a job that pays above a monthly minimum income threshold, they make no payments. This compelling value proposition shifts some of the financial risks onto schools, which face more pressure to set their students up for success. 

Still, as compelling as the ISA loan may seem on the surface, Evan knew the importance of reading and understanding the finer details of his future payment obligation. “For me, what worked was anticipating the worst-case scenarios and then getting the answers to these questions.”

Let’s do it as Evan did.

Income Share Agreements: Is There a Safety Net?

So, say you attend Galvanize’s immersive bootcamps and sign their income share agreement. Per the ISA, you pay a $2,000 deposit and defer the rest of your tuition until you’re employed, after which you start paying 10 percent of your gross monthly income. This means that if you’re earning $60,000 annually, you’ll have to pay $6,000 per year or $500 per month.

Given this, let’s run through possible scenarios you could encounter after you complete your program, and discuss how your ISA would play out for each. 

1. I can’t find a job. How can I pay for my ISA? 

This is possibly the most common concern among students who take the ISA route. After all, although a bootcamp education costs less than traditional four-year education, it’s still an investment that incurs debt. The pressure to pay thousands of dollars gets heavier if participants don’t find a job after completing the program. To alleviate this, an ISA comes with several safeguards. 

• Payment-Free Grace Period. ISA payments don’t start immediately after you finish the program. Instead, you get a window of opportunity to look for a job, secure one, and fix your finances. During this period, you’ll receive job-search assistance from Galvanize via their Career Prep curriculum.
  
  
• Minimum Income Threshold. As the name implies, you’ll need to hit a certain gross monthly income to ‘activate’ your ISA payments. This means that if you’re earning $0, you’re not at all obligated to make payments. You just have to submit a payment deferment request and the required documentation to your ISA administrator. So, when do you actually start paying?
  
  For Galvanize, it used to be that the obligation to pay an ISA started once a student landed a job that paid $4,166.67 per month (equivalent to $50,000 per year). In 2020, that floor rose to $5,000 per month (equivalent to $60,000 per year) to give graduates more downside protection, especially in a pandemic-struck economy. 

2. I have a job that pays $60,000 or above. When will my ISA obligation end?

For people who earn at least $5,000 per month (equivalent to $60,000 per year), the Galvanize ISA has upside protection in the form of two limits. Hitting one of them—whichever comes first— fulfills the ISA.

• Maximum Number of Payments. With Galvanize, your payment stops once you’ve made the maximum 48 monthly payments. 
• Payment Cap. Your Galvanize ISA is fulfilled once your monthly payments reach 1.4x the initial funding amount you received. 

Note that if your payment window closes before you’ve reached the maximum number of payments or the payment cap, your obligation will expire, provided you’ve remained in compliance with your contract. That’s true even if you’ve paid less than the amount you received.

For Evan, it was these safeguards and limits that allowed him to focus on his classes and not on the overall cost of these classes. “[The terms of the ISA] kind of gave me a sense of freedom, especially with not having to gather the funds before you start the course. I only needed a couple thousand dollars to deposit and I was good to go,” he said. 

“I know that’s still not a small amount of money, but it was much more doable than coming up with a lot more all at once. It was a big aid, especially when what you really need to be doing is focusing on learning these computer science fundamentals and soft skills for the workplace.” 

To Better Horizons

Shortly after completing his program, Evan found himself on a red-eye flight to a job. Three weeks into his job search, Evan received a job offer as a junior software engineer for the global bank payments company, borderless™. “We’ve got a lot of [payment services] going on and several of those features are features that I’ve worked on since getting hired,” said Evan.

Knowing how the ISA loan works in the face of the worst-case scenario helped him become more confident in his decision to finance his training with an ISA. It became an opportunity for him to invest in himself.

“The way [the ISA] is structured is kind of nice because [when I get a raise], it’s like I continue to have the same standard of living on what I’m currently making. Then, the extra [money from the raise] just goes to paying the ISA,” said Evan.

“That will fit in pretty well with the financial strategy that my wife and I have because only a manageable portion will be taken to pay my obligation… [The ISA] won’t negatively affect how I strategize paying off my student loans or saving for retirement.”