Does an Income Share Agreement Make Sense for You?
by Carolyn Ford
Income share agreements (ISAs) are gaining traction among students as a means of funding higher education.
In this blog post, Carolyn Ford explores the pros and cons of ISAs. She also describes how to compare an ISA to a traditional loan.
As students accept offers of admission and prepare to arrive on campus, they usually take stock of their capacity to cover the costs of their degree through personal financial resources, employment, institutional financial aid, private or government-sponsored awards, or loans. This is a complex decision.
To these financial options, students can now add the possibility of the ISA.
What Is an ISA?
Colleges and universities across the U.S. and Canada are rolling out ISA programs as an alternative to student loans. Two of the most recent examples of institutions offering ISAs to students include The University of Utah and Purdue University. Institutions may create ISAs in house or partner with third-party financial firms to create and administer their ISAs.
An ISA is a legally binding contract between the student and the new institution. In exchange for a commitment to pay a percentage of future earnings, the student receives credit in their student account today that covers all or a portion of their tuition.
Like a loan, the student is obligated to make monthly payments (after graduating) until they pay off the ISA amount.
The key difference between an ISA and a traditional student loan is that the monthly amount students pay post-graduation is dependent upon future income.
ISA payback rates vary by school, program, and major. Majors with lower starting salaries will have a longer-term and a higher payback rate.
Is an ISA right for you? In this blog post, I explore the factors you should consider.
Specific terms and conditions include:
- The amount
- The share percentage of the future graduate’s income
- The income threshold: Earn the threshold or more and the requirement to pay the share percentage begins. If a graduate is earning less than the threshold, then the requirement to pay is not triggered.
- The payment cap: An amount in multiples of the agreed amount that the graduate repays. In the case of a 1x cap, the graduate is re-paying the same amount of funds they received in their student account. Payment caps of 1.5x or up to 2.0x may also be possible.
- The term: The maximum number of payments to be made. The term is usually expressed as the number of monthly payments.
These last three items—the threshold, the payment cap, and the term—should be very clear in the terms and conditions of the contract to limit the downside risks to the student of entering into this kind of commitment.
Further Reading
Other possible terms:
- Grace period: A set period of time post-graduation that enables the new graduate to find a job and get their lives set up before beginning to make payments.
- Buyout clauses: The terms and conditions that would enable the graduate to make a lump sum payment that removes further requirements to pay and thereby closes out the ISA.
Benefits of an ISA
The main benefit of an ISA is the opportunity to focus on one’s studies without immediate pressing financial concerns. With an ISA, the student is converting their future potential into current financial capital, completing their degree in a timely manner, then repaying the amount once capable of doing so. If you are unemployed at any point, you do not need to make any payments; your ISA resumes as soon as you begin working again.
Risks to Avoid
Since ISAs are a new financial instrument, students must take care to consider the jurisdiction in which they are signing the agreement. From one year to the next, the body of knowledge about ISAs will continue to grow as will the number of institutions creating them.
In each instance, a student considering an ISA is advised to compare and contrast the money repaid via an ISA and via a specific loan. In some cases, the terms and conditions of an ISA will leave the student better off financially than under loan conditions, while in other instances the loan may still provide the better option.
A Sample ISA
The student signs an ISA and receives a $20,000 credit in their student account. Then, after graduation, if the new graduate is earning the income threshold of $50,000 or higher, they will pay 6% of their gross salary to the institution. With a payment cap of 1.25x, the maximum amount paid will be $25,000. At payments of $250 a month, the graduate will have paid off the ISA gradually over 100 months or just over 8 years.
Key Takeaway
In order to determine whether an ISA or a loan is right for you, it is helpful to mock up the terms and conditions of each in a spreadsheet. Also, try exploring comparison tools such as Purdue’s or The University of Utah’s. These tools help you compare the monthly and total payment amounts of an ISA versus a private or public loan. You may also want to check out this glossary of ISA terms to learn more!
Source: WES.org
Vernon B.C. launches Rural and Northern Immigration Pilot
By Shelby Thevenot
A municipality in B.C.’s Okanagan Valley is accepting applications from immigration candidates
A municipality in B.C.’s Okanagan Valley is accepting applications from immigration candidates
New immigrants and temporary foreign workers in Canada may have the opportunity to apply for Canadian permanent residence in Vernon, B.C.— a small city in Canada’s wine country.
Vernon became the fourth community to accept applications through the Rural and Northern Immigration Pilot (RNIP) on February 1. The program will be open until February 2022.
The following communities are now accepting applications through the pilot:
- Brandon, Manitoba
- Altona/Rhineland, Manitoba
- Sault Ste. Marie, Ontario
- Vernon, B.C.
The pilot was created to connect foreign workers with Canadian employers from communities facing labour shortages.
Candidates need an eligible job offer for a full-time permanent position in a participating community.
A total of 11 communities are involved in the program. The following communities have yet to begin accepting applications.
- North Bay, Ontario
- Sudbury, Ontario
- Timmins, Ontario
- Thunder Bay, Ontario
- Moose Jaw, Saskatchewan
- Claresholm, Alberta
- West Kootenay (Trail, Castlegar, Rossland, Nelson), British Columbia
Applying for permanent residence through Vernon
In order to qualify for the RNIP in Vernon, candidates must first meet federal eligibility requirements.
Vernon requires that candidates have a Canadian Language Benchmark (CLB) of level five or higher in English or French. All candidates must complete a candidate profile on the city’s webpage.
Candidates are ranked on Vernon’s Comprehensive Ranking System (VCRS). Much like the federal Express Entry system, candidates are given a score based on human capital factors. Vernon’s system includes in its scoring grid the candidate’s potential to integrate and stay in the community.
Prospective Vernonites can receive up to 100 points for factors such as age, and language as well as their connection to the community. Having previously worked, studied, or bought a property in Vernon will help improve a candidate’s score. Candidates can get points for having traveled to the community, for having a Canadian driver’s license or permit, and for having family connections in the area. The wage of the candidate’s job offer may also have an effect on their score.
Once the federal and community eligibility criteria are met, profiles will be placed into a pool. A committee will accept applicants up to the last day of every month.
The committee will offer 10 recommendations per month to candidates who best fit the community criteria based on Vernon’s ranking system. If a candidate is not chosen for a recommendation, they will be put back into the candidate pool for a period of up to three months after the application date. After three months the application will be declined, however, candidates may re-apply.
Vernon is allowed to give 100 recommendations for each year of the pilot. Candidates need to have a job offer with an hourly wage of at least $25 per hour in order to qualify.
There is an opportunity for those who are currently studying, working, or residing in Vernon to bypass the wage requirement. The committee will give nominations to up to 10 percent of candidates who have a job offer that pays between $20 and $24.99, as long as their VCRS score meets or exceeds 65 points.
Candidates applying from abroad must complete a 15 to 30-minute interview via videoconference. Those who are currently in the community may need to attend an in-person interview, at the committee’s discretion.
Job opportunities in Vernon are available through the city’s RNIP webpage.
Source: CICnews.com
Preparing for the IELTS Exam
by IDP
Welcome back to our three-part series on the International English Language Testing System (IELTS). In part one, we gave you an overview of the IELTS and answered some popular questions. In part two, we will answer more questions and dive into the steps that will help you succeed on your test.
IELTS is a high-stakes test and you must be well prepared to demonstrate your English skills to the fullest. IDP IELTS provides you with multiple support tools to help you prepare to do your best on the test.
What can I do to prepare?
Doing some practical preparation for IELTS is a great way to prepare. However, consider that an IELTS band score of 7 (the highest score is a 9) represents thousands of hours spent on studying the English language. The best way to prepare for the test is to use your English skills every day using every opportunity you can to speak English. Speak to your friends in English, write notes in English, listen to the radio or TV in English, and read in English. Avoid waiting until the day or the week before the test and start practicing now.
Is it difficult to prepare for the IELTS exam?
IELTS is a comprehensive language test that measures a range of language abilities. You need to have a general level of English to complete it, but preparing for the test requires investing a lot of your time. Be sure to review all of the extensive free resources available. The more you prepare, the easier it is to demonstrate your English language skills.
What kinds of resources are available to prepare for the test?
IELTS professionals have developed several resources that are an excellent way to help you prepare.
- Free IELTS seminars: These in-person sessions run by IELTS professionals are great for people who prefer a face-to-face experience. There are several sessions held each month.
- Held at multiple locations across Canada
- Interactive
- Provide details on all parts of the test
- Practice sample listening/speaking/reading/writing questions
- Ask questions specific to your needs
- Learn tips in each session on how to score higher on either the listening and reading or speaking and writing sections of the test
- IDP masterclass webinars: There are two webinars held each month. They are very convenient for those who cannot attend face-to-face sessions. These sessions are very popular and people find them extremely helpful.
- Online 90-minute sessions run by IELTS professionals
- Live and interactive
- Practice sample listening/speaking/reading/writing questions
- Learn tips on how to avoid the most commonly made mistakes
- Information about how the test is scored and what examiners are looking
for - Introduction to the IELTS band scores and the requirements to achieve particular ratings
- Ask questions in real time
- Cover all four skill areas (writing, reading, speaking, and listening) in one session
- Facebook Live sessions: These sessions are a great way to ask specific questions and get precise answers.
- Live question and answer sessions
- Hosted by IELTS expert Don Oliver
- Monthly sessions conveniently scheduled across time zones
- Concentrate on one skill area at a time
- IELTS blog: The blog posts are an excellent opportunity to learn about a variety of different aspects of the IELTS exam. They contain an abundance of information and could answer questions you did not even know you had.
- The IELTS blog is updated twice a month and contains targeted solutions to specific areas
- Written by IELTS professionals who understand the difficulties you can encounter
- Covers a wide array of topics from general issues that relate to IELTS and immigration to specific details about Academic Writing Task 1
- Easy to access current and archived topics
- 30-day free online IELTS preparation with test registration: When you book your exam, you receive access to test-prep tools.
- Your choice of a single module (reading, writing, listening, or speaking)
- Up to 25 hours of online study time
- Free practice test in your chosen module
- Detailed feedback and model answers for all activities
- Expert IELTS tips and study strategies
- First module is free upon booking (additional modules can be purchased)
- Available at select locations
- Free practice tests: There are free practice tests available for each module in both the Academic and General Training exams.
- Download free practice tests
- Become familiar with the format of the test
- Compare your answers with model answers
Which area should I spend most of my time preparing for?
Every person has their own individual strengths and weaknesses. In most cases, the writing section generates the lowest band scores. If you are interested in finding out average global scores based on first language, country of origin, or country where the test is taken, check Test Taker Performance 2015.
Is there anything else I should know about preparing for the exam?
- Determine what your personal strengths and weaknesses are
- Use as many resources as you can to prepare for the test
- Go to ieltscanadatest.com for more tips
- Spend time understanding what and how skills are being assessed for a higher chance of success
- Take a long-term approach
- Practice English in any way to improve your language skills
Most importantly, push yourself to improve every day. Good luck!
Ready for more best practices in regard to exam day? Read part three of our IELTS series.
Opinion: North Bay is finally in the immigration game.
By:
Those coming to North Bay, and 10 other communities under the new program, are not coming to take someone’s job. They have to have a job offer but for the employer to make that offer he or she has to demonstrate that advertising did not produce a Canadian citizen or permanent resident qualified and willing to do the job'
Those coming to North Bay, and 10 other communities under the new program, are not coming to take someone’s job. They have to have a job offer but for the employer to make that offer he or she has to demonstrate that advertising did not produce a Canadian citizen or permanent resident qualified and willing to do the job'
North Bay will get some new immigrant residents this year, as it does every year. But starting this year some will come in under a new program, the Rural and Northern Immigration Pilot, which is scheduled to last five years.
Some readers may need a short primer on immigration. There is a difference between immigrants and refugees. Most immigrants come to Canada in the economic immigration streams, with cash in their pockets and skills to offer Canadian society. Many already have a job. They can also come in through spousal or parental sponsorships, a program that requires the sponsor to cover their living expenses.
Refugees are those who really need our help, as they are fleeing persecution, violence or war, and often have no funds of their own. They are either sponsored by the federal government for their first year in Canada or by church groups, groups of five concerned citizens or other groups, who raise funds to sponsor a family for the first 12 months in Canada.
Refugees have gone on to become doctors, lawyers, engineers, parliamentarians, scientists, business owners…you name it. Adrienne Clarkson was a refugee from Japanese-occupied Hong Kong and became our 26th Governor-General since Confederation.
Those coming to North Bay, and 10 other communities under the new program, are not coming to take someone’s job. They have to have a job offer but for the employer to make that offer he or she has to demonstrate that advertising did not produce a Canadian citizen or permanent resident qualified and willing to do the job. The other Northern Ontario cities in the pilot program are Timmins, Sudbury, Sault Ste. Marie and Thunder Bay.
The North Bay & District Chamber of Commerce, The Labour Market Group, Yes Employment Services, the North Bay & District Multicultural Centre, the city’s economic development department—all partners in the new immigration program, have been making the point for years and have the data to prove it—we have local jobs going unfilled due to the lack of qualified candidates.
The new program, the result of Northern Ontario Liberal MPs lobbying, including our own Anthony Rota, and other voices advocating change, including mine, is based on the successful Atlantic Immigration Pilot. Northern Ontario has much in common with Atlantic Canada, in that cities are smaller and spread out and our population is declining.
For far too long we have allowed our immigration system to benefit Montreal, Toronto, and Vancouver (MTV in immigration circles) at the expense of the rest of the country. Those three cities are bursting at the seams and Northern Ontario is not.
It’s going to be a while before we see people arriving in North Bay under the pilot program but people continue to arrive under other programs, such as Federal Skilled Worker, Federal Skilled Trades, Canadian Experience Class, Family Class, temporary worker programs and international student programs.
Patti Carr of the Chamber, who is the project lead, says they will start with the 20 or so people who are already in North Bay who would like to start the permanent residence process. She expects that it will take a month or two and then they will look at those from outside the city and country.
There are more than 2,200 expressions of interest in the queue. There is a cap of 100 in the first year, which may arise later. The federal government will evaluate the project, not on how many people come, but by how many stay. Applicants have to demonstrate a desire to live and stay in the community.
What all this means is that we’re finally in the game. Sure, we have had immigrants arriving for years, but not in the numbers we need. Baby boomers are retiring in droves. Families are smaller. People are dying.
The indigenous population is growing but we will need all of that population plus immigration to grow our Northern Ontario cities and businesses.
Don Curry,
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