ImpactAlpha, May 10 – Bogota-based Lumni offers “income share agreements,” under which a company funds a student’s college education up front in exchange for a fixed share of the student’s income after graduation. The agreements, known as ISAs, have grown in popularity as student loans have come under scrutiny for high interest rates, long repayment periods and rigid terms. Lumni’s cash and stock deal for New York-based Paytronage expands Lumni’s U.S. presence; Lumni acquired Base Capital, based in St. Louis, earlier this year.
- ISA leader… Lumni has serviced almost 10,000 agreements in Colombia, Mexico, Peru, Chile and the U.S.
In the U.S., agreements range from $3,000 to $25,000. A typical agreement requires a student to pay between 10 and 15% of their income over a period for up to six years. At the end of the period, the obligation ends even if the repayment isn’t complete, company officials told the Miami Herald.