Deferred Tuition vs Income Share Agreements: A Guide

Guide to Deferred Tuition vs Income Share Agreements
Guide to Deferred Tuition vs Income Share Agreements

Introduction 

Indian students present themselves with immense skill but at times lack in the financial section when it comes to getting a good quality education. The students enroll themselves in prestigious universities for getting a chance to stay in a healthy competitive environment and hone their skills to an even further extent. Bootcamps are the simple and straightforward means of making a student acquire the necessary skills to be industry-ready. 

Not only do these bootcamps cater to the educational needs of the students but are also highly considerate of the financial options they provide to their students. The article below lists down the options of deferred tuition and income share agreement for coding bootcamps in India and the pros and cons of income share agreements and deferred tuitions.

There are several income share agreement providers which include the Coding Ninjas’ bootcamp as well. 

What is Deferred Tuition? 

Deferred tuitions are the method when you have to pay for the time you are enrolled in a Bootcamp by either paying a small upfront fee and paying the rest later when you get a job or by paying no upfront fee at all and paying the entire amount after you have been benefited from the Bootcamp and have started working at a good company. 

What is an Income Share Agreement? 

Income Share Agreement as the name suggests is an agreement where you have to allow the Bootcamp organizers to have a share of your income after you have graduated from their Bootcamp. The income share agreement gets activated when you start earning above a set amount.

The share is given to the Bootcamp organizers for a certain period of time which is stated in the Income Share Agreement. 

Advantages of Income Share Agreements and Deferred Tuitions

  1. Downside Protection: Coding bootcamps offering the options of income share agreements and deferred tuitions only start taking their fee after you have landed a job that was considered to be the minimum earnings at the time of your agreement. If you secured a job which pays you less, you will have to pay less to the organisers and in case you secured a job which pays you more, you will have to pay more to the organisers. There is the minimum downside of an income share agreement and deferred tuition. 
  2. Diversity Promotion: For bootcamps in particular, loans aren’t approved because of certain rules and regulations. Students have to either pay in their own pockets or turn to their parents for getting their fees paid. If there is less or no upfront fee while participating in a bootcamp, the pressure of paying the amount right away to learn the necessary skills gets highly reduced and the student is able to focus on what’s important – the required technical skills.  

Difference Between Income Share Agreement and Deferred Tuition

  1. For students who are opting for the deferred tuition option, the clause is that they have to pay monthly installments of a certain fixed amount which is stated before taking admission in the bootcamp. Income share agreement on the other hand states that the amount to be provided to the coding bootcamp will essentially be a share of the income the student learns after he or she graduates from the Bootcamp. 
  2. Deferred tuition generally doesn’t have a minimum income threshold which means that even if the student is earning less than the amount which is determined to be the minimum income, he or she has to pay all the installments of the coding bootcamp opted for. Income share agreement on the other hand works on the principle of a minimum income threshold which means that the student will only start paying after he or she secures a job that pays him or her more than the minimum income amount stated in the agreement. 
  3. The amount paid by a student when taken the option of deferred tuition is fixed whereas the amount paid by a student when taken the option of an income share agreement varies according to the pay scale of the job the student secures and can be exceedingly high as compared to the original bootcamp cost in case the student starts working at a place with a high salary. 

What Happens When You Do Not Land A Job After You Graduate? 

In case the student is unable to secure a job after he or she graduates from the coding bootcamp, the agreement doesn’t get canceled but is rather extended giving the students a ‘grace period’. Even after that if the student is unable to secure a job, he or she does not have to pay anything to the bootcamp organisers.

However, this is a rare case as the curriculum and the structure of a bootcamp are carefully curated so as to make sure that the student possesses enough expertise to land a better job than his fellow batchmates at college. 

Why Should You Take an Income Share Agreement? 

There are several reasons why a student should consider taking an income share agreement. Some of the situations where you might consider opting for an income share agreement are listed below: 

  1. You do not have the money to pay the upfront fee set by the bootcamp. 
  2. You cannot take a loan for paying your bootcamp fee. 
  3. You are not sure if the skills you have acquired will actually help you in getting a job and you need to be certain that the bootcamp is helping you achieve what they’re promising. 

Why Should You Not Take an Income Share Agreement? 

Income share agreements have their own pros and cons. The situations where an income share agreement might not be the best fit for you are listed under: 

blog banner 1
  1. In case you secured a job that has a high salary, you will need to pay the bootcamp a fee much higher than what was anticipated when you were taking admission in the bootcamp. 
  2. In case you are going to college as well as taking a bootcamp and your college fee is funded by a student loan, you might end up paying back for your education for a significant amount of time after you start working. 
  3. In case you are opting for a bootcamp solely for the purpose of learning a skill and not making a career out of it, going down the road of student loans is much more preferable and advisable. 

What Other Payment Options Exist? 

In case you were wondering, there are several other payment options you can opt for while paying for a coding bootcamp. 

  1. A loan from the bootcamp lender: There are certain bootcamps that have tied up with lenders such as Ascent Funding and Upstart which provide the students with loans which the students have to pay back in the traditional manner – in installments with interest. 
  2. Upfront payment: Students are also presented with an option of paying for the entire bootcamp before the bootcamp starts. The upfront payment is significantly lower than the amount the student has to pay when taking the option of deferred payment or income share agreement. 
  3. Scholarships: Bootcamps also offer a significant amount of scholarships to meritorious and underrepresented students. 

Frequently asked questions

Are income share agreements worth it?

If the student does not have the bandwidth of taking loans and/or paying a fee but is in need of acquiring industrial skills, income share agreements are worth it.

What is deferred tuition?

Deferred tuition is a payment method where you do not pay the entire fee at once but pay it in monthly installments. The duration of the installments varies from bootcamp to bootcamp.

What is the main benefit of income share agreements?

The main benefit of income share agreements is that you do not have to pay any upfront fee and pay only when you have actually gained something from the bootcamp.

What income share means?

Income share means that you will have to pay for the bootcamp you graduated from after you landed a job. The amount that is paid to the bootcamp is a certain part of your income which the student has to pay for a set period of time.

Is the income share agreement valid in India?

Yes, income share agreement is valid in India.

Key Takeaway

Income share agreements and deferred tuition options are two of the most viable options that help you fund your education with guaranteed results. The financial pressure on you and your parents is vastly reduced and you work even harder knowing that the final outcome will help you pay back the organisers who have worked tirelessly in ensuring you are provided with the best education.

In case both of these options do not appeal to you, there are several other options listed above from which you can choose. 

Happy Learning!