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Home » Student Loans » Private » Stride Funding Income Share Agreements Review

Stride Funding Income Share Agreements Review

Updated: December 9, 2021 By Robert Farrington

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Stride Funding

One of the most popular benefits of federal student loans is the ability to join an Income-Driven Repayment (IDR) plan. With private loans, on the other hand, your payments remain the same regardless of how much you earn.

But while IDR plans have made federal student loans overwhelmingly popular, what happens if you hit your annual or aggregate federal loans borrowing limit? Are there any borrowing options besides federal student loans that offer income-based repayment?

It turns out that the answer is yes. Income Share Agreements (ISAs), like the ones offered at Stride Funding, are alternatives to student loans. With an ISA, you commit a percentage of your income to repayment. If you're wondering whether an income share agreement could be right for you, keep reading our full Stride Funding review to learn more.


Stride Funding Logo

Quick Summary

  • Payments based on a fixed percentage of your future income 
  • No monthly payments if you're earning less than $40k annually
  • No co-signer or minimum credit score requirement
GET A QUOTE

Stride Funding Details

Product Name

Stride Funding

Min Borrowed Amount

$5,000

Max Borrowed Amount

$25,000 per year

$50,000 aggregate maximum

Repayment Period

5 to 10 years

Payment Cap

2x borrowed amount

Promotions

None

Table of Contents
What Is An Income Share Agreement?
Pros And Cons Of Income Share Agreements
Stride Funding ISA Terms and Benefits
Are There Any Fees?
How Does Stride Funding Compare?
How Do I Contact Stride?
Is Stride Funding Worth It?
Stride Funding FAQs
Stride Funding Features

What Is An Income Share Agreement?

An income share agreement is a funding option where a person agrees to repay a set percentage of their income in the future in exchange for money today. ISAs are a relatively uncommon way to fund an education, but they may make sense for people who are averse to taking out traditional debt.

Pros And Cons Of Income Share Agreements

Pros

  • Downside protection: You only pay a percentage of what you earn. If you earn very little, you repay very little. Compared to private loans, this is very helpful.
  • Fixed repayment period: Government loans are repaid over 10 years to 25 years (or more in some cases). The ISA is more of a “rip the band-aid” off approach. The repayment period usually ranges from 5 to 7 years.
  • Generally a limit on repayment: Most ISAs limit the total amount you repay over the life of the agreement. Once you reach the limit, you’re done repaying.

Cons

  • Repayment can eat up a large chunk of your salary: If you exclusively use income share agreements, your repayment amount may eat up 15% or more of your annual salary. That’s a significant amount of money to repay.
  • Difficult to refinance: Once you take out an income share agreement, you’re basically stuck repaying it as agreed. It's not easy to refinance to a standard private student loan at a lower interest rate.
  • May pay more overall: A person who outearns expectations will definitely overpay on an ISA. Even with the limits to repayment, high earners may end up overpaying compared to a standard loan.
  • Not easy to do the math: Comparing ISAs to loans is nearly impossible. You don’t know what you’ll earn after graduation, so you’re stuck guessing.
  • Do not qualify for Public Service Loan Forgiveness: ISAs are a form of private educational funding. Borrowers are not eligible to have the loan forgiven through federal programs like Public Service Loan Forgiveness (PSLF).

Stride Funding ISA Terms and Benefits

ISAs are generally offered by schools. But Stride Funding is one of the few companies that offer income share arrangements regardless of the school that you attend. Since it is a unique form of financing, it’s important to understand some of the fine print associated with Stride Funding’s ISA.

Note: Stride Funding recently came under scrutiny for their lending model, with allegations that it could discriminate against minority students. See the full report here.

These are a few details to understand:

Eligibility

To qualify for a Stride Funding ISA, you'll need to be a US citizen attending a US school. Also, Stride ISAs are currently only being offered to the following students:

  • Graduate students
  • Undergraduate senior

Finally, you'll need to be enrolled at a 4-year college or university, or an accredited PA school, to qualify for a Stride Funding income share agreement.

Repayment Terms

Stride Funding offers income sharing arrangements that last from 5 to 10 years following graduation. The repayment period starts after a grace period of three months.

Salary Repayment Requirements

The percentage of income you repay depends on the amount you borrow. Each income share agreement is different, so Stride doesn’t provide strict guidelines. The percentage is based on your expected future income following graduation, but can be as low as 2%.

Higher expected earners (such as computer science engineers) are likely to see the lowest income share rate percentages. On the other hand, people expected to earn lower compensation (teachers, journalists, etc.) may be required to share a higher percentage of income.

Downside Protection

If you’re earning less than $40,000 per year ($3,333.33 per month), you don't have to make any payments whatsoever. That means you keep your money during your lower earning years, but you’ll repay Stride when you earn more.

Funding Limits and Repayment Cap

You can fund up to $25,000 per year of school through Stride Funding. Stride limits your repayment to twice what you fund. That means a person who borrows $30,000 will never repay more than $60,000, no matter how much she earns.

Are There Any Fees?

Stride doesn't charge any application or origination fees. You will be charged a $10 late fee though if you're more than 10 days late on a payment.

Stride says that it doesn't charge any prepayment penalties, but that's a bit misleading. If you try to pay off your loan early, you'll have to pay enough to hit your 2x payment cap.

Stride Funding expects that less than 5% of its borrowers will hit their payments caps if they made their monthly income-share payments as agreed. So, in a way, most borrowers would be penalized for paying off their agreements early.

How Does Stride Funding Compare?

Since Stride doesn't actually offer student loans, it can be difficult to compare them with other private lenders. But if you anticipate that it will take awhile for your income to ramp up after graduating, going with Stride could provide some much needed payment flexibility. 

On the other hand, graduates who expect to have high starting salaries after leaving school, may be better off taking out a traditional student loan and paying it off as quickly as possible to minimize interest charges. Check out this quick comparison here:

Header
stride logo
Ascent Student Loans
Funding U logo

Rating

Min Borrowed Amount

$5,000

$1,000

$3,000

Income-Based Payments

Yes

No

No

APR Type

N/A

Variable and Fixed

Fixed

Cosigner?

Not Allowed

Allowed, Not Required

Not Allowed

Cell
GET A QUOTE
READ THE REVIEW
READ THE REVIEW

How Do I Contact Stride?

You can get in touch with Stride by calling 214-775-9960 or emailing them at hello@stridefunding.com.

Note that Stride uses Knowledge Finance (a subsidiary of MOHELA) to service its loans. So if you questions about a bill or payment, that 's who you'll need to reach out to.

The toll free phone number for Knowledge Finance is 855-479-0490. Its customer service hours are 8 AM – 7 PM (CT), Monday – Thursday and 8 AM – 5 PM (CT) on Friday.

Is Stride Funding Worth It?

If you've exhausted your federal student loan options, an ISA could be a better choice than private student loans. You get the benefit of income-based payments (which private loans can't match) while still having the guarantee that your repayment period won't last any longer than 10 years.

But is the ISA from Stride Funding a better deal than federal student loans? For undergraduate borrowers, probably not. If you're a graduate student, though, it could be worth comparing an ISA to Grad PLUS loans, which have the highest interest rates of all federal loans. 

However, if you plan to go into public service (military, government, teaching, non-profit work, etc.) and may later qualify for PSLF, you'll definitely want to stick with federal loans, even if a Grad PLUS loan is your only federal loan option.

Stride Funding FAQs

Let's answer a few common questions about Stride Funding?

Are income-share agreements bad?

Whether an income-share agreement would be good or bad for you will depend largely on your goals. If you primarily want the assurance that your monthly payments will always be affordable, an ISA could be worth considering. But if paying the least overall is your top priority, you might be better off sticking with a traditional student loan.

Is Stride Funding legit?

Yes, while Stride has only been around since 2018, its leadership team is filled with experienced executives and it has raised $3.7 million in seed funding over three rounds.

Where is Stride Funding located?

Stride is headquartered in Dallas, TX and also has offices in Boston and Los Angeles.

Is getting approved for with Stride more difficult than getting a GradPLUS loan?

For most borrowers, no. Stride says that the approval process for its ISAs is very similar to GradPLUS Loans in that both funding options only require a minimal credit check and don't require cosigners.

Stride Funding Features

Min Borrowed Amount

$5,000

Max Borrowed Amount

  • Per Year: $25,000
  • Lifetime: $50,000

APR

N/A

Repayment Period

5 to 10 years

In-School Deferment

Yes

Origination Fee

No

Prepayment Penalty

No, but borrowers will be required to pay enough to reach their payment cap.

Late Fee

$10

Grace Period

3 months

Eligible Students

  • Graduates
  • Undergraduate juniors and seniors

Minimum Income Threshold

$40,000

Payment Cap

2x times borrowed amount

Cosigners Allowed

No

Customer Service Phone Number

214-775-9960

Customer Service Email

hello@stridefunding.com

Loan Servicer

Knowledge Finance

Loan Servicer Phone Number

855-479-0490

Loan Servicer Customer Service Hours

Monday – Thursday, 8 AM – 7 PM (CT)

Friday, 8 AM – 5 PM (CT)

Address For Sending Payments

Knowledge Finance
P.O. Box 3976
Chesterfield, MO 63006-3976

Promotions

None

Stride Funding Review
  • Terms and Requirements
  • Repayment Costs
  • Customer Service
  • Ease of Use
  • Rewards and Perks
Overall
3.6

Summary

Stride Funding’s income-share agreements are alternatives to student loans. They offer income-based payments and don’t require cosigners.

Pros

  • $40k minimum income threshold
  • Borrow without a cosigner
  • Never pay more than two times your original borrowed amount

Cons

  • May cost more overall than traditional student loans
  • No benefit to early payoff of your ISA
  • Check Out Stride Funding
Robert Farrington
Robert Farrington

Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.

He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.

He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.

Stride Funding Income Share Agreements Review
Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.
Comment Policy: We invite readers to respond with questions or comments. Comments may be held for moderation and are subject to approval. Comments are solely the opinions of their authors'. The responses in the comments below are not provided or commissioned by any advertiser. Responses have not been reviewed, approved or otherwise endorsed by any company. It is not anyone's responsibility to ensure all posts and/or questions are answered.
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