Carlos Lopez By Carlos Lopez

Training & Education · Student Loans

Income Share Agreements Are Credit Products: Your Rights Under CFPB Rules

Bootcamps have marketed Income Share Agreements as "not a loan" for years. The CFPB disagrees — and that distinction changes what protections actually apply to you.

Why "It's Not a Loan" Doesn't Hold Up

An Income Share Agreement (ISA) lets a student attend a bootcamp or training program in exchange for a percentage of their future income over a set period, instead of a fixed tuition payment. Providers have long marketed ISAs as fundamentally different from a loan — no principal, no fixed debt, "you only pay if you earn." On September 7, 2021, the Consumer Financial Protection Bureau (CFPB) rejected that framing directly: in a consent order against ISA provider Better Future Forward, the CFPB found that its ISAs were extensions of credit under the Consumer Financial Protection Act and "private education loans" under the Truth in Lending Act (TILA). The order found the provider had violated Regulation Z by failing to disclose the amount financed, the finance charge, and the annual percentage rate — disclosures every other private education loan is legally required to provide.

This wasn't an isolated case. In July 2023, the CFPB and attorneys general from 11 states filed suit against Prehired and affiliated companies over ISA origination and collection practices, again asserting that ISAs are covered credit products subject to consumer lending law.

What This Means for You Practically

If your ISA is legally a private education loan, the provider was required to give you TILA disclosures before you signed — a clear statement of the amount financed, the finance charge, and something comparable to an annual percentage rate, along with disclosures about non-dischargeability in bankruptcy. If those disclosures were missing, incomplete, or buried, that's a specific, checkable compliance failure — not just a complaint about how the contract feels.

It also means state usury laws and other consumer credit protections that apply to private loans may apply to your ISA, even though it wasn't labeled a loan. Some ISA contracts include effective annual percentage rates, once calculated properly, that exceed what several states allow for consumer credit — this is exactly the kind of "encumbered by hidden interest rates" pattern regulators have flagged.

Checking Your Own ISA

  1. Locate your original contract and check whether it discloses an amount financed, a finance charge, and an APR-equivalent figure — if none of these appear, that's a real gap.
  2. Calculate the effective total cost: your income percentage × payment window × a realistic income estimate, then compare that total against what a standard loan of similar size would cost.
  3. Check whether the contract requires payment even in fields unrelated to your training — a common complaint pattern regulators have specifically flagged.
  4. Check whether the provider offered any placement or outcome guarantee tied to the ISA, and whether that guarantee's terms were ever satisfied.

If you believe your ISA wasn't properly disclosed as credit, you can file a complaint directly with the CFPB, which has active enforcement interest in this exact pattern.

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