> Yeah, I remember reading about these when they launched and on paper they seemed like such a bad deal. The only group of people who would benefit from them over traditional loans are people who know they would never be able to pay off the equivalent debt.
Right, which goes to the point the author made about these agreements seeming exploitative. Why exactly aren't they (education ISAs) exploitative is my question. They're essentially loans with much fuzzier terms, and the Consumer Finance Protection Bureau agrees [0].
But, for the sake of accuracy, one should note that the author's company wasn't offering education ISAs. They were operating on more of a talent agency model, and their basic ISA was 10% of pre-tax income for 18 months [1]. I think 18 months is a reasonable term, and 10% could be a reasonable percentage, but, again, the terms are inherently opaque, because there's no way for the consumer to predict what the outcome would be.
What I wonder is what sort of jobs/careers the clients were ending up in, and where they started. Knowing that would make it possible to judge whether the outcomes were worthwhile or not. We're not talking about sending people back to school to earn additional qualifications, so, I'm guessing it wasn't a case of people landing $100+K/year engineering jobs and such. They say their aim is to be able to take someone making $40k and get them to $52k, possibly in part by moving cities. I wonder how satisfied these early clients were with what they received.
Right, which goes to the point the author made about these agreements seeming exploitative. Why exactly aren't they (education ISAs) exploitative is my question. They're essentially loans with much fuzzier terms, and the Consumer Finance Protection Bureau agrees [0].
But, for the sake of accuracy, one should note that the author's company wasn't offering education ISAs. They were operating on more of a talent agency model, and their basic ISA was 10% of pre-tax income for 18 months [1]. I think 18 months is a reasonable term, and 10% could be a reasonable percentage, but, again, the terms are inherently opaque, because there's no way for the consumer to predict what the outcome would be.
What I wonder is what sort of jobs/careers the clients were ending up in, and where they started. Knowing that would make it possible to judge whether the outcomes were worthwhile or not. We're not talking about sending people back to school to earn additional qualifications, so, I'm guessing it wasn't a case of people landing $100+K/year engineering jobs and such. They say their aim is to be able to take someone making $40k and get them to $52k, possibly in part by moving cities. I wonder how satisfied these early clients were with what they received.
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[0]: https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes...
[1]: https://techcrunch.com/2019/11/21/placement/