FREQUENTLY ASKED QUESTIONS: INCOME SHARE AGREEMENTS
Who issues MentorWorks Income Share Agreements (ISAs)?
The MentorWorks Income Share Agreement (ISA) program is issued by Blue Ridge Bank, N.A. and provides ISA financing through a unique “fund and support” model, which enables you to complete your education and launch your career with an ISA which is a flexible, innovative alternative to traditional fixed payment installment loans. By offering a robust career enhancement platform, in addition to ISA financing, MentorWorks can also support you professionally with career development, mentoring opportunities and direct access to top-notch employers through our Talent Accelerator Platform (TAP).
ISA Selection Process
Does MentorWorks have eligibility requirements to apply for their ISA program?
You are eligible to apply if you are enrolled in one of the programs with our partner institutions, are a US citizen or permanent resident, are at least 18 years of age (or age of majority in your state) and are not currently delinquent on any loans. Please note these are minimum requirements only. MentorWorks has rigorous underwriting standards and applying does not guarantee funding approval.
How are students selected for the ISA program?
MentorWorks funds students in their only or last year of study in graduate programs, bootcamps, certificate programs with one of our
Is this service available for international students?
Unfortunately no, not at this time.
What steps are required to apply for a MentorWorks ISA?
- Step 1: To apply for the MentorWorks ISA program, issued by Blue Ridge Bank, N.A., begin the process by visiting our online platform and create a login: my.mentorworks.com
- Step 2: Gather the following information:
- Current contact information and educational program details
- Current non-expired, government issued photo ID
- US Work authorization document such as a Social Security Card, US passport or Green Card
- Two references
- SSN and DOB
- Some additional items may be requested:
- Any other ISA obligations (if any)
- Employment and/or higher education history (if any)
- Log into my.mentorworks.com and complete the online application
How long does it take to find out if my application is approved?
Once you submit your application, the MentorWorks team will review and let you know if you are approved. The average response time it takes to review your application and give you a decision is approximately 7-10 business days. However, additional documentation may be required so the decision time may be longer if documents are not promptly provided.
Please note: MentorWorks has rigorous underwriting standards. If approved, you will be presented with the terms of your ISA as issued by Blue Ridge Bank, N.A. Read the contract carefully and sign the final documents online to finalize.
ISA Structure and Financing
What is the difference between ISAs and loans?
Income Share Agreements (ISAs) are a flexible alternative to traditional fixed payment installment loans. In this model, students will pay a fixed percentage of their future income for a fixed period of time, up to a maximum cap without incurring interest. Students do not pay unless they are employed and reach the minimum income threshold. The payments adjust according to the level of the student’s income – providing downside protections for the student. ISAs may be issued by Blue Ridge Bank, N.A.
- Monthly payments are calculated by applying your income share rate to your total monthly earned income
- ISA obligations can be ended earlier by making early payments as listed in the early payment schedule
What is the maximum amount of financing that I can ask for?
Typically, MentorWorks can fund students who are in need of $5,000 – $22,500 but the team reviews each application/request on a case-by-case basis. We’ll check with your school to make sure the funding is appropriate to what you owe your institution.
What is the timeframe regarding ISA payment duration and obligation?
- Payment Term: With a MentorWorks ISA, you only make payments within a specific timeframe, usually 3-7 years depending on your program, and then the obligation is over. Loan payments, on the other hand, can extend indefinitely until you fully pay off the principal and interest.
- An ISA ends when one of these three (3) events occur:
- You reach a payment cap or a prepayment cap
- You complete required number of payments
- Payment Term is complete (Payment term is the required payments + maximum deferment months)
Is there an interest rate with an ISA?
ISAs are not loans. With an ISA, so there is no interest rate. Interest does not accrue (i.e., adds on to principal, increasing your total payable balance) or capitalize (i.e., requires paying interest on unpaid interest); you will know the maximum amount that you will pay, no matter what.
With a loan, unpaid interest increases the principal balance (and requires you to pay interest on interest). Therefore, the final payoff amount can increase over the life of a loan if you do not continue making minimum monthly payments.
What is the income share rate?
This is the percentage of your income you pay each month with an ISA. Unlike an interest rate (that you would have with loans), an income share rate refers to the percentage of future annual income that funded students pay for the financing amount for which they are approved.
Is this tied to my credit score?
No. MentorWorks will check your credit file for current or past delinquencies, foreclosures, repossessions, bankruptcies and other patterns of non-payment. Meanwhile, if you are approved, your credit score will not impact the terms of your ISA contract nor will payment forgiveness affect your credit score adversely.
Conversely, with a loan, your credit score may affect the terms of your loan and could impact eligibility and/or a change in the interest rate.
What if I am unable to make payments?
MentorWorks offers payment deferrals for those who are unable to make payments if they have not met the minimum income threshold as specified in the contract. For example, if you lose your job or if your income drops below your minimum salary as stated in your contract, your payments will be paused – this is considered a deferment period. You must, however, contact us regarding such changes.
What if I default on payments?
Unlike a loan, ISAs are default-free. If you are earning under the minimum income threshold, MentorWorks will defer your payments upon submission of proof of your earnings.
For every month you are in deferment, one month is added to the Payment Term. You are typically allowed to defer payments up to 24 months, after which it will reduce required payment months from your Payment Term. After a certain number of deferral periods, the payments will be forgiven.
Can I make early payments?
Yes. You can pay off your ISA earlier than the full term, and pay lower amounts than the full cap.