Income Share Agreement: Making students industry ready at 0 upfront cost

Education is a core pillar of society and is the most powerful weapon which can be used to change the world. Every person has the right to quality education but unfortunately, it has become unaffordable even for middle-class families. To attain quality education a middle-class family raises a bank loan which is either paid by the parents or by the student once he starts working no matter what emolument he gets. People with lower incomes are thrown out of the race because no bank approves risky loans. Now those who cope with the financial issues enter the pipeline and get a low paying job or no job at all after graduation. Tech industry is evolving much faster than our traditional education system can keep up with. Educational institutes are producing engineers who are not familiar with the technologies used by industry today. So people are raising debts to gain an education which is obsolete.  

 Income Share Agreements (ISA) is a financing model widely adopted by universities and vocational schools in countries like USA, UK and is now gaining traction in India. Here students who are unable to pay tuition fees upfront get the opportunity to pay back the tuition after they land a job. ISAs are characterized by a percentage share of future income for some specified period of time.  

 Outscal is one of the first EdTech startups in India to adopt this model. We believe that quality education should not be limited to those who have the financial resources to afford it. We don’t charge our students anything until we help them find a high paying job with a minimum CTC. We curate courses to make students industry-ready, as a result, our current students are getting job offers from companies before the completion of their courses. 

Education is probably the most obvious use case for an ISA but it’s not far fetched to think about other industries such as travel and healthcare adopting a similar contract to expand their reach. Implementation and enforceability are a big concern in the industry at the moment and that is something we have been hard at work over the past year. Anyone interested in discussing further details please feel free to reach out to me and I will be happy to share our thought on how it has evolved for us from an Indian context.