Sabio's Income Share Agreement, Tell Me About It!

Income Share Agreement

Have you wanted to learn to code but felt wary abot the investment it takes to get started? Well, you're in luck, because on August 15, 2019, Sabio launched its Income Share Agreement(ISA) program. To boil it down, this means you'll be able to get a full Sabio education without paying a dime until you begin earning more than $3,750/month (or $45,000 a year).

What exactly is an ISA?

An income share agreement is a financial tool through which a student receives education funding in exchange for sharing an agreed-upon percentage of income over a defined and finite period of time after leaving the program. If you're not earning at least the minimum income threshold on a monthly basis ($3,750, annualized to $45,000), you're not paying.

What's the catch?

No catch. We're implementing this new risk-sharing model because we want to make sure our students know we're invested in their success and aligned with their outcomes. Sabio is 100% dedicated to helping highly motivated individuals launch careers in tech. We care about delivering value to our students and have since we opened in 2013, when our first cohort financed its training with a success based payment plan. We're confident and comfortable aligning our training and payments with our students' success.

And if this payment option doesn't work for you, we have several other options to choose from: up-front payment via check or any major credit card, Sallie Mae, Skills Fund, the GI Bill, Vet Tec, Vocational Rehab and more.

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Down Payment on Tuition

There is a $0 down payment for our full-time web development course, but you must be admitted to the program first. Admission might require you to participate in our PreWork program. If you're just beginning, we offer a flexible one-month PreWork program for $99. We do this so that you're truly prepared for the immersive boot camp experience and have a foundational understanding that allows you to get the most of your time with us

Alternatively, if you already understand Javascript and HTML/CSS basics, you can take a test to determine your level of preparedness and waive the Prework requirements for $0.

Income Share and Minimum Income Threshold

You'll agree to pay 13 percent of your monthly gross income starting three months after you leave the program. When your monthly earned income is less than $3,750 (equivalent to $45,000/year), your account will be placed in deferment status, and you will not make payments for every month your income is below the threshold. For example, if for some reason you get laid off and are not earning $3,750 for a month or two, you do not need to make payments, those months. Also, during those two months you are unemployed, your credit score will not be negatively impacted.

If you leave Sabio and end up working at a job that pays less than this $3,750 per month, every month that you don't meet our income threshold, you are not required to make a payment. You will be required to submit pay stubs or tax returns regularly. If you've overpaid, you will receive a refund, and if you've underpaid, you're required to come true.

Required Payments and Payment Window

You are not required to make any payments while you remain enrolled at Sabio. After a three-month grace period, you will be required to begin making payments as soon as your monthly earned income is above $3,750 (annualized to $45,000. If you sign an ISA for $15,000 with us, you'll be required to make 48 mothly payments during a period of time that may last as long as 96 months. Payments are not required during the months when your income is below the minimum income threshold.

Is there a Payment Cap?

Our ISA cap is 1.5x tuition. We set that number to protect our highest-earning graduates. Let's say, for example, you were to land a job at Amazon making $200,000 a year: if you were to make payments on that for 36 months, you'd end up paying way too much. Once Sabio grads reach the payment cap, their financial obligations will be extinguished. Currently, tuition at Sabio is $15,000, which makes the payment cap $22,500.00.

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Who is eligible?

Sabio's ISA is available to anyone who is admitted to the program. Additional eligibility requirements inclued being a U.S.citizen or permanent resident, and being 18 years or older. There is a credit check with this program but no co-signers are required. This is meant to be a fresh start. Sabio is focused on the idea that if you came in and do the work, you will graduate and get a job, and only then is an obligation due.

Which Programs is an ISA Available for?

We offer this on all Sabio campuses (Culver City, DTLA & Orange County), as well as to people who train remotely full-time (subject to state approval)

What if I don't get a job, or if the job doesn't pay enough? Does my future job need to be in tech?

If your job doesn't meet the minimum income amount of $45,000, you do not have to make a payment. There are also no requirements regarding the type of job you pursue.

At the same time, should you choose to work in tech, we have ample resources to help you secure a job in the industry

When does the agreement end?

You complete the agreement when the first of the following occurs: (a) You make 48 monthly payments. (b) You hit the payment cap, or (c) 96 months (eight years) have passed since the end of your grace period. In the unlikely situation in which your income never meets the minimum monthly income threshold over the course of 96 months, the agreement goes away: There is no further obligation.

How do ISA payments compare to traditional financing loans?

Sabio's tuition for our 13 weeks or full-time training is $15,000. If you were to secure a loan from Skills Fund with an interest rate of 11.16% APR, and you made 36 monthly payments of $496.00 per month, your total investment would equal $17,856. With a traditional loan, you would be required to make these monthly payments regardless of what you earned. You would make interest-only payments for the first 5 months and then in month 6, you would be required to pay interest + your standard payments every month.

Payments for your ISA begin 3 months after you complete the program, once you are making at least a monthly salary of $3,750.00. If you graduate and secure a job earning less than $3,750 per month($45,000 annualized), you will not be required to make payments until you are earning above the minimum income threshold. If you graduate and secure a job earning $45,000 ($3,750 per month), on a monthly basis your ISA payment will be $487.50. If you graduate and secure a job earning $60,000, your monthly payment will be $650.

For more information, checkout www.sabio.la, attend one of our info sessions, or email our founders at founders@sabio.la

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