The Case Against Income Share Agreements (ISAs)

By Corey Kossack, CEO and Founder of 

I don’t believe in the Income Share Agreement model, commonly referred to as the “ISA”, as a means to make high-quality education available to the masses.

The ISA has been popularized by coding bootcamps and other for-profit education providers as an alternative to student loans and expensive, up-front tuition payments, which have been the norm for many years but have failed to ensure any reasonable level of success in the real world of work.

In lieu of these more traditional payment methods, ISAs defer the cost of tuition until you land a job with your newfound skills. Sounds great, right? Well, it’s not exactly “deferred tuition.” Instead, companies who offer ISAs charge a percentage % of your salary on a monthly basis for a period of time, typically inflating the cost of the program by a significant amount.

To put this in perspective, you’ll pay between $10,000-$30,000 to participate in an ISA-funded, skills bootcamp.

We could play out the many “what-if” scenarios that could come back to bite you if things don’t work out quite as planned after graduation. And even if all goes smoothly, it’s important to understand the true cost of entertaining your typical, “pay nothing up front,” offer that many skills and education providers offer today.

Looking Beyond The Cost

Cost aside, the ISA model falls short as the education financing method of choice because it doesn’t operate in the best interest of the candidate or the employer. It does, however, operate in the best interest of the company offering the ISA because they get paid in almost all scenarios following completion of the given program.

Most ISAs will allow you to forgo payment if you don’t secure a new job making over a certain amount. The agreement does not, however, do anything to ensure you find the RIGHT job at the RIGHT company.

This is a big deal. Why?

A career transition is hard enough without the added risk of ending up in the wrong role with the wrong company, and a whole bunch of debt to repay to boot.

Bucking Popular Opinion

When I founded Aspireship, I went out to raise capital to support the launch and growth of the business. The most common thing I heard from venture capitalists was, “Why aren’t you doing an ISA model?”.

You see, VCs love the ISA model because it creates an opportunity for the company to make significantly more money per student / candidate than pretty much any other business model you can imagine for this type of business. The company is able to offer top-notch education with “no money upfront” and all sorts of “guarantees” with a price tag in the end that’s much greater than you could ever charge directly. Throughout the process, I was essentially told that if I adopted the ISA model for Aspireship, I could raise lots of money, very quickly, to support the growth of the business.

I refused, and instead took a much more difficult approach to build the business.

Illustration on of hiring partners and Aspireship developing a business model where learning SaaS sales foundations and obtaining job placement is cost-free to the job seeker

The Solution

To solve the problem, we created an innovative business model where employers pay a fee when they hire an Aspireship graduate AND they succeed at the company. This model is difficult to implement, but once you get it right, it maximizes the chance of success for both the candidate and company.

Here’s how it works. A candidate signs up to take a foundational skills course that teaches them about the industry and type of role they are seeking to pivot into (in the case of Aspireship, this is either SaaS Sales Foundations or Customer Success Foundations, designed to prepare candidates for a variety of SaaS roles).

We provide a free video library to support your learning, or for the deeper dive and to complete our industry-recognized foundations programs with a certificate to boot, there is a one-time commitment of $180. If you choose a job with an Aspireship Hiring Partner after graduating, we’ll return your money. Companies pay Aspireship to recruit our graduates, shifting costs from students to employers.

Also, the courses are completely self-paced. Do the work or don’t — there is no one holding the candidate’s hand to shepherd them through the process from start to finish. While this goes against the norms of creating accountability to someone else, in order to maximize the chances of completion, it naturally measures the motivation and commitment of the candidate to their own success. You’d be surprised how many candidates will say they want it, but won’t actually do the work when left to their own devices.

Those with the will to do the work are then presented with an assessment that measures their fit and capability to step into the desired role, leveraging what they learned throughout the foundational skills course. If they are able to demonstrate their coachability and aptitude for the role, they enter the Aspireship Talent Network and we help them land a job with the partner company and role that is right for them.

Why It Works

The model works so well because it requires the bar to be kept very high. If the quality slips, companies will no longer be interested in hiring from our candidate pool, let alone paying us for it.

For this to work, we need to consistently produce humble, self-motivated learners that will keep persevering until they succeed. We also need to help them find the right situation for THEM, which in turn means finding the right match for the company that hires them.

Not every candidate is for every company, and not every company is for every candidate.

Without solving the needs of both the candidate and the company, the problems that are so prevalent after candidates are hired at companies will persist.

Is this easy to accomplish?

Not in the least.

Are we doing it and is it working?

You bet.

Are you open to learning more about our curriculum and training? Click here. Or, if you are ready to start learning now, sign up!

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