Income Sharing Agreements: A Sharia Compliant Revelation or a Departure from Sharia Principles?

Introduction

Income Share Agreements (ISAs) are a type of alternative financing arrangement. These agreements are financial structures in which an individual or organisation provides something of value (often a fixed amount of money) to a recipient who, in exchange, agrees to pay back a percentage of their income for a fixed number of years. ISAs have gained prominence as an alternative to the traditional student loan system in American higher education, and a number of private companies now offer ISAs for a variety of purposes, including as a funding source for college tuition. ISAs are often considered to be less financially risky to a borrower than a traditional private student loan.