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Stride Funding’s income-share agreements are best for students who don’t have established credit histories or access to a credit-worthy co-signer. But because of its short repayment terms and potentially high rates, Stride Funding should only be used after exhausting other financial aid options.
- Pros and Cons
- Key Takeaways
- Company Overview
No co-signer required
No minimum credit score
No payments until you make $30,000
Low funding maximum
Funding only available for up to two years
Payments can be up to 15% of income
Short repayment periods
Not available to students of all schools
- Stride Funding is a young company that was founded in 2018.
- It offers income-share agreements for bachelor’s, master’s, and doctoral programs.
- Stride Funding doesn’t charge application or origination fees.
- Its financing options are only available to permanent residents and U.S. citizens.
- Stride Funding is not available in Alabama, Colorado, Iowa, South Carolina, and Washington.
Stride Funding was founded in 2018 by Tess Michaels while she was a student at Harvard Business School.
Stride Funding uses an outcomes-based model to issue income-share agreements (ISAs). Unlike traditional private student loan lenders that issue loans based on borrowers’ credit histories and current income, Stride Funding considers factors like the student’s university, major, and future earning potential to determine their eligibility.
Stride Funding has been the target of some controversy. In 2021, the Student Borrower Protection Center, an advocacy organization, released the results of its investigation that alleged Stride Funding charged students attending minority-serving institutions, including historically Black colleges and universities (HBCUs), significantly more than it charged students attending other schools.
Michaels disputed the allegations via an emailed statement to The New York Times:
“We disagree with the conclusions reached in their report and believe their analysis fails to consider important nonracial factors that we will look forward to discussing collaboratively,” Michaels said. “Stride believes all students deserve transparency and access, which is why we make our rates publicly available and fund students without ever requiring a co-signer."
- Year Founded 2018
- Official Website www.stridefunding.com
- Loans Offered Income-share agreements for undergraduate, graduate
- Customer Service Phone: (214) 775-9960. Email: Hello@stridefunding.com
- No co-signer required: With traditional student loans, you usually will need a co-signer to qualify since college students are unlikely to have lengthy credit histories or sufficient incomes. But with Stride Funding, students can get financing without a co-signer.
- No minimum credit score: Private student loan lenders usually require borrowers to have good to excellent credit. By contrast, Stride Funding doesn’t have a minimum credit score.
- No payments until you make $30,000: When you take out a typical private student loan, you agree to a repayment plan. Your payments are due even if you’re unemployed or make a lower-than-expected wage, unless you qualify for forbearance. Stride Funding works differently; you only make payments once you’re employed and make at least $30,000 per year.
- Low funding maximum: While the best private student loan lenders allow you to borrow up to the total cost of attendance, Stride Funding’s maximum is $25,000 per year and $50,000 per student.
- Funding only available for up to two years: Stride Funding’s ISAs are only available for up to two years. If you intend to go to graduate school or pursue a doctorate degree after using a Stride ISA for your bachelor’s program, you’ll need to find another source of funding.
- Payments can be up to 15% of income: Under an ISA, you repay a portion of your income each month. Depending on how much you make, your payment may be as much as 15% of your income.
- Short repayment periods: With many traditional private student loans, you can have up to 15 or even 20 years to repay your loan. Stride Funding’s repayment term is much shorter; your repayment period is just five years, which can cause you to have higher monthly payments than you’d have with a traditional loan.
- Not available to students of all schools: To qualify for Stride Funding’s ISAs, you must attend one of its partner schools. If your selected college or university isn’t one of the company’s partners, you won’t qualify for an ISA.
Although ISAs issued by companies like Stride Funding are often described as alternatives to private student loans, the Consumer Financial Protection Bureau announced that ISAs are private education loans under the Truth in Lending Act, and companies must follow the same requirements for private student loan disclosures and consumer protections.
Student Loans Offered by Stride Funding
Stride Funding is a provider of ISAs. Students can qualify for $2,500 to $25,000 of funding per year, for a maximum of two years. Students in undergraduate, graduate, and doctoral programs are eligible for funding.
Rather than having fixed or variable annual percentage rates (APRs), Stride Funding’s ISAs are repaid over five-year terms. Borrowers repay the money by paying a percentage of their income, but they only have to make payments once they’re employed and earning at least $30,000 per year.
Stride Funding doesn’t charge application fees or origination fees.
Loan Eligibility and Approval
To qualify for an ISA from Stride Funding, you must meet the following criteria:
- You must be enrolled in an eligible four-year school at least half-time.
- You must be within two years of your expected graduation date; first-year and second-year undergraduate students are not eligible.
- You must be a U.S. citizen or permanent resident.
- You cannot live in or attend school in Alabama, Colorado, Iowa, South Carolina, or Washington.
- You must have a GPA of 2.9 or better.
Stride Funding doesn’t have financing options for parents, international students, or students pursuing associate degrees. If you don’t meet Stride Funding’s requirements, it may direct you to another lender that offers private student loans.
Are Co-Signers Required?
Stride Funding uses an outcomes-based model, so it doesn’t have a minimum credit score, nor does it require co-signers.
Is Loan Pre-Qualification Available?
Stride Funding does have a pre-qualification option you can use to check your eligibility for an ISA. According to the lender, it takes less than a minute to get a quote, and you only need to provide basic information about yourself, your selected college, and your field of study.
Length of Time for Loan Approval and Disbursement
After submitting your application, Stride Funding will review your information and determine whether to approve you for an ISA. If approved, Stride Funding will send the money to your school. If there is extra money left over, the school may refund the remainder to you according to its policies.
Stride Funding doesn’t disclose how long its approval and disbursement process takes. However, it’s usually a good idea to apply for financing at least a month before you need the funding.
Loan Fees and Repayment Options
Although Stride Funding doesn’t charge origination or application fees, there are several fees to keep in mind:
- Late fee: $10
- Return payment fee: $20, or the maximum permitted under state law, whichever is less
- Failure to provide income documentation: $30
Stride Funding doesn’t offer any loan discounts.
For all ISAs issued to students in undergraduate, graduate, and doctoral programs, there is just one repayment option. All of Stride Funding’s ISAs have five-year repayment terms that begin after a three-month grace period. However, you only have to make payments if your income is over $30,000.
Your payments may increase as your income increases, and you need to submit documentation of your income every year so that Stride Funding can recalculate your payment. Depending on your yearly earnings and the terms of your agreement, your payments can be 1.7% to 10% of your income.
For example, let’s say you borrowed $10,000 and earned $40,000 per year, or $3,333.33 per month. If your agreement was to pay 10% of your income, you’d pay $333.33 per month.
If your income increases and you earn $50,000 per year, you’d pay 10% of your new monthly income, $4,166.67, giving you a monthly payment of $416.67.
Stride Funding does not have a rewards program.
Loan Forbearance and Discharge Options
With Stride Funding, you can qualify for up to six months of forbearance if you experience financial hardship. Your ISA is also terminated in cases of death or permanent disability.
Is Student Loan Refinancing Available?
Stride Funding doesn’t offer student loan refinancing.
Customer support is available by phone or email:
- Phone: (214) 775-9960
- Email: Hello@stridefunding.com
Stride Funding’s ISAs are serviced through Knowledge Finance. Existing borrowers can contact Knowledge Finance with questions about their accounts or to make payments.
To contact Knowledge Finance, call (855) 479-0490 or submit a secure message. Knowledge Finance’s hours of operation are Monday through Thursday from 8 a.m. until 7 p.m. Central Time, and Friday from 8 a.m. until 5 p.m. CT.
Applying for a Stride Funding Student Loan
To begin the application process, use the pre-qualification tool to check your eligibility. Stride Funding will ask you for your college, major, expected graduation date, and the amount of money you need.
Before turning to alternative financing options like private student loans and income-share agreements, make sure you fill out the Free Application for Federal Student Aid (FAFSA) to qualify for federal, state, and institutional financial aid.
If you’re eligible for an ISA, the site will prompt you to fill out the complete application and enter your Social Security number and other personal details. The site will prompt you to consent to a hard credit check. While Stride Funding doesn’t have a minimum credit score, it does perform credit inquiries and looks for derogatory information like bankruptcies or loan defaults when making a decision.
|Stride Funding||PNC||ISL Education Lending|
|Loan Types Offered||ISAs for undergraduate, graduate, doctorate||Undergraduate; graduate; professional||Undergraduate; graduate; parent|
|Undergraduate Fixed APR||N/A||4.49%–12.24%||3.85%–7.91%|
|Undergraduate Variable APR||N/A||5.14%–12.89%||4.44%–8.89%|
|Repayment Options||ISA payment plan||Deferment; interest-only; full payment||Full payment; interest-only repayment; deferred payment|
Although Stride Funding’s ISAs are positioned as useful alternatives to student loans, borrowers should only explore this option after exhausting other financial aid opportunities, including federal student loans. That’s because Stride Funding’s ISAs are loans with relatively short repayment terms, and an ISA could take up a significant portion of your income during repayment.
Stride Funding is best suited for students who struggle to qualify for other kinds of financing because they don’t have established credit histories and don’t have relatives who can co-sign a loan with them. If you use an ISA, carefully review the disclosures so that you understand how payments work and what percentage of your income will go toward repayment.
ISAs certainly aren’t for everyone. See a more typical selection of the best student loan lenders here, or browse the best student loans without co-signers if you’ll be applying on your own.
Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of student loan lenders. We collected thousands of data points across 30 lenders—including loan types, interest rates, fees, loan amounts, and repayment terms—to ensure that we help readers make the right borrowing decision for their education needs.
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