Edly student loans review: Income share agreement guide

Introduction to Edly and income share agreements

Edly offers Income Share Agreements (ISAs) that fund upper-level students in exchange for a percentage of future income rather than interest-bearing debt. Parents can avoid cosigning risks, while students gain flexible repayment tied directly to post-graduation earnings. This guide covers eligibility, costs, and key trade-offs to help you decide.

For families navigating the gap between federal aid and the total cost of attendance, Edly represents a distinct alternative to private student loans. Unlike traditional lenders that rely heavily on credit scores and cosigners, Edly focuses on the student’s potential, funding primarily juniors, seniors, and graduate students in specific high-growth fields.

An Income Share Agreement is not a loan in the traditional legal sense. Instead of a principal balance that accrues interest, you receive funding now and agree to pay a fixed percentage of your gross income for a set period after leaving school. If you earn less than a specific threshold, you pay nothing for that month. If you earn a high salary, your payments increase, though they are capped at a maximum amount.

You’ll learn exactly how this model works, who qualifies, and how the total cost compares to traditional private lending options. If you are new to this concept and need a broader overview before diving into Edly specifically, review our guide to Income Share Agreements to understand the fundamentals of this financing model.

Quick comparison: Edly ISA vs traditional loans

Before examining the specific mechanics of an Edly account, it is vital to understand how this product stacks up against the financing options you may already be considering. The table below highlights the fundamental differences between Edly, federal loans, and standard private loans.

Source: College Finance comparison of standard loan terms and Edly program features (current as of January 2025).

When evaluating these options, keep the following “rules of thumb” in mind to determine if Edly is a potential fit for your situation:

• The “High Earner” Rule: If you expect a very high starting salary immediately after graduation, an ISA may end up costing you more than a low-interest private loan because you will hit the payment cap faster.
• The “Cosigner” Rule: If you do not have a creditworthy cosigner, Edly is often superior to high-interest “bad credit” private loans because it does not require a credit check or cosigner.
• The “Federal First” Rule: Always maximize federal student loans first. Federal loans offer lower fixed rates and government protections that private entities cannot match.
• The “Safety Net” Rule: If you are entering a field with volatile or uncertain income (e.g., commission-based sales, startups), Edly offers built-in safety because payments pause automatically when income drops.

For a broader look at traditional lending options to benchmark against these rules, review our comprehensive guide to understanding your borrowing options.

How Edly’s ISA program works

Edly operates differently than a bank. When you apply for funding, you are entering into a contract based on your future potential rather than your past credit history. Understanding the specific numbers and terms is essential to calculating the potential obligation.

According to Edly’s program documentation as of January 2025, funding typically ranges from $5,000 to $15,000 per academic year. This funding is generally intended to cover “last mile” expenses—the gap remaining after scholarships, grants, and federal loans have been applied. There is a cumulative lifetime limit, which usually caps around $25,000, though this varies by the specific program and major.

The core of the agreement is the Income Share Percentage (ISP). This is the portion of your pre-tax (gross) monthly income you agree to pay back. According to Edly’s contract terms, this ranges between 2% and 5% depending on the amount borrowed and your projected earnings. Unlike a loan interest rate, this percentage does not change over the life of the contract.

The repayment term is the number of months you are required to make payments. Edly terms typically require up to 84 months (7 years) of payments. However, there is also a “maximum contract window.” If you have not finished your required payments within this window (often 10 years) due to periods of low income, the contract expires, and the remaining balance is forgiven.

One of the most distinct features of the Edly ISA is the Minimum Income Threshold. According to Edly’s standard contract terms, you are only required to make payments if your earned income exceeds $30,000 per year (or $2,500 per month). If your income falls below this level—due to job loss, returning to school, or taking a lower-paying role—your payments pause automatically. These months do not count toward your required payment count, but they do provide immediate cash flow relief.

To visualize how this works, consider a student who receives $10,000 in funding with a 4% income share and a $30,000 threshold.

Source: College Finance calculations based on standard Edly terms (accessed January 2025).

Eligibility requirements and partner schools

Edly is not available to every student at every college. Because the model relies on the likelihood of future employment, eligibility is tighter than federal loans and more specialized than general private loans.

Edly focuses on students who are close to graduation. Generally, you must be a junior or senior in an undergraduate program, or a graduate student. This minimizes the risk for investors, as students closer to a degree are more likely to enter the workforce soon.

Your major matters significantly. Edly prioritizes fields with high employability and clear salary trajectories. Common eligible programs include:

• STEM fields (Science, Technology, Engineering, Mathematics)
• Healthcare and Nursing
• Business and Finance
• Specific trade or vocational programs

You must be attending an eligible school. Edly partners with a network of Title IV accredited public and private non-profit universities. They do not typically fund students at for-profit institutions or schools with poor graduation outcomes. While the list changes frequently, it generally includes major state universities and established private colleges.

A major differentiator for Edly is that there is no FICO credit score requirement and no cosigner requirement. This makes it an accessible option for students who may have “thin” credit files or parents who are unable or unwilling to put their own credit on the line.

However, you must generally be a U.S. citizen or permanent resident. International students are typically not eligible for Edly direct funding, though exceptions may exist depending on specific university partnerships.

If you find you do not meet these specific criteria—perhaps you are a freshman or in a major not covered by Edly—you may need to explore other funding avenues.

Compare rates from 8+ lenders to find your best loan option

For students who are ineligible for both ISAs and traditional loans, maximizing grant aid is critical. Review our guide to finding scholarships and grants to find funds that do not need to be repaid.

Application process and funding timeline

Applying for an ISA through Edly is generally faster and more digital-forward than traditional bank processes. Since there is no credit check, the focus is on verifying your enrollment and academic details.

1. Create an Account: Visit the Edly platform and create a profile. You will enter your school, major, expected graduation date, and the amount of funding you need.
2. Pre-Qualification: The system will instantly tell you if you are eligible and provide estimated terms (your income share percentage and payment cap). This is a “soft” inquiry and does not impact your credit.
3. Document Upload: You will need to upload proof of enrollment, such as a transcript or a letter from your registrar, and identification documents.
4. School Certification: Edly will contact your school’s financial aid office to certify your enrollment and ensure the funding fits within your Cost of Attendance (COA). This step prevents over-borrowing.
5. Final Approval and Disclosure: Once the school certifies the amount, you receive a Final Disclosure. This document outlines the exact terms, the payment cap, and the number of payments required.
6. Disbursement: Funds are sent directly to your school to pay for tuition and fees. If there is a surplus (money left over after tuition is paid), the school will issue a refund to you for living expenses.

According to Edly’s application process documentation, the entire process from application to approval can take as little as 3 to 5 business days, provided you upload documents quickly. However, the actual disbursement of funds depends on your school’s financial aid office timelines, which can sometimes take 2–3 weeks during peak enrollment seasons (August and January).

True costs: payment scenarios and comparison to interest rates

Because ISAs do not use interest rates, comparing them to traditional loans requires a bit of math. You must look at the “Effective APR”—the equivalent interest rate you would have paid to reach the same total cost.

Before you compare: Remember that federal student loans for undergraduates currently have interest rates significantly lower than most private options. An ISA will almost always be more expensive than a Federal Direct Subsidized or Unsubsidized loan. The real comparison should be against private loans or Parent PLUS loans.

Let’s assume a student receives $10,000 with a 2.0x cap ($20,000 max repayment) and a 5% income share over a 5-year (60 month) term. (Note: Terms vary; this is for illustrative modeling).

Source: College Finance analysis of ISA repayment trajectories. Effective APR estimates are approximations based on cash flow timing.

As the table shows, the cost of an ISA varies wildly based on success.

Scenario A (Low Income): If you earn near the threshold, you pay back very little—potentially barely more than the principal. In this case, the ISA is cheaper than any loan.

Scenario B (High Income): If you land a high-paying job immediately, you will hit the payment cap (2x the loan amount) relatively quickly. This results in a high effective APR, often higher than standard private loan rates.

See personalized private loan rates to benchmark against these terms

A critical financial consideration is taxes. According to IRS Publication 970, with traditional student loans, you can deduct up to $2,500 in interest payments from your taxable income as of 2025. However, currently, the tax treatment of ISA payments is less clear, and in many cases, payments made on an ISA are not tax-deductible. This effectively increases the cost of the ISA compared to a loan where interest is deductible.

Protection features and borrower benefits

While the potential cost of an ISA can be higher for high earners, Edly includes structural protections that traditional private lenders rarely offer. These features act as insurance against financial hardship.

• Automatic Payment Pause: If your income drops below the minimum threshold (e.g., $30,000), payments stop automatically. You do not need to apply for “hardship deferment” or prove you are destitute; you simply verify your income.
• No Interest Accrual: During periods where you aren’t paying (unemployment, grad school, low wages), the balance does not grow. In a traditional loan, interest usually keeps stacking up during forbearance, leading to a ballooning balance. With Edly, if you owe $10,000 and pause payments for a year, the obligation remains the same.
• Job Loss Protection: Because payments are tied to income, losing your job means your payment drops to $0 immediately. This protects your monthly cash flow and prevents default during crises.
• Credit Score Protection: Utilizing these pauses does not hurt your credit score. In the traditional loan world, missing a payment ruins your credit; in the ISA world, not paying because you have no income is a feature of the contract, not a violation.

According to Sandy Baum, education finance expert, “Borrowing is not inherently bad; the question is how much, and under what terms.” Edly’s terms are designed to mitigate the risk of “bad borrowing” where payments overwhelm a graduate’s starting salary.

Limitations and important considerations

Despite the protections, Edly is not the perfect solution for everyone. It is important to be transparent about the limitations before signing a contract.

Edly is a private financing option. It does not qualify for federal programs. You will not be eligible for Public Service Loan Forgiveness (PSLF), federal Income-Driven Repayment (IDR) plans like the SAVE plan, or federal consolidation. If you plan to work in public service, sticking with federal loans is crucial.

Edly is highly selective regarding schools and majors. If you are an Art History major at a small liberal arts college, you may not qualify. The model relies on statistical data predicting high earnings, which naturally favors STEM, business, and healthcare fields.

Traditional student loans can often be refinanced to lower rates later. ISAs are more complex to refinance. While some lenders are beginning to refinance ISAs into traditional loans, it is not yet a standard offering across the industry. You should assume you will be in this contract for the full term.

Students often dislike the feeling of a “success tax.” If you work hard, get a promotion, and double your salary, your payment doubles. While it is capped, the psychological impact of seeing a payment jump from $200 to $400 simply because you got a raise can be frustrating compared to a fixed loan payment that stays the same regardless of your success.

Who should consider Edly: ideal borrower profiles

Is Edly right for you? Use this checklist to see if you fit the profile of an ideal Edly candidate.

• I have maxed out my federal student loans: You have already taken the available federal Direct Loans.
• I do not have a cosigner: You cannot access competitive private loans because you lack a creditworthy cosigner.
• I am in a high-growth major: You are studying engineering, nursing, computer science, or business.
• I value flexibility over lowest cost: You are worried about finding a job immediately and prefer the safety of $0 payments over the certainty of a fixed bill.
• I expect variable income: You plan to work in a field where income fluctuates (e.g., commission sales, gig economy), making fixed loan payments risky.

Interpretation: If you checked most of these boxes, Edly is a strong contender. If you have a willing cosigner with good credit (700+), you will likely save money in the long run by choosing a traditional private loan with a fixed interest rate.

Edly offers an innovative solution for students needing gap financing without the burden of rigid monthly debt or the need for a parent cosigner. By aligning payments with your future success, it removes the risk of defaulting during tough economic times.

• Access: Funding available without credit history or cosigners.
• Safety: Payments automatically scale down to $0 if income falls.
• Clarity: A fixed end date and payment cap ensure you never pay forever.

If you believe Edly is the right fit:

1. Visit the Edly website to run a pre-qualification check (this will not affect your credit).
2. Gather your transcript and financial aid info.
3. Calculate your estimated starting salary to see what your monthly obligation would look like.

If you have a cosigner or strong credit, you should compare rates to ensure you aren’t paying a premium for protections you might not need.

Frequently asked questions about Edly ISAs

No. Edly does not require a FICO credit check or a cosigner for approval. Instead, they evaluate your “future potential” based on your school, major, and academic standing (GPA). This makes it an ideal option for students who have “thin” credit files or parents who cannot cosign. They may perform a soft pull to verify identity, but this does not impact your credit score.

Currently, ISA payments are generally treated as ordinary expenses and are not tax-deductible. Unlike federal or private student loans, where you can deduct up to $2,500 in interest paid annually according to IRS Publication 970, ISA payments do not qualify for the student loan interest deduction. You should consult a tax professional for advice on your specific situation, as tax laws regarding ISAs are subject to change.

Edly primarily funds juniors and seniors (students within 2 years of graduation) and graduate students. They generally do not fund freshmen or sophomores because the risk of a student dropping out or changing majors is higher earlier in their academic career. Eligibility is strictly tied to being close to entering the workforce.

If you enroll in graduate school, your Edly payments will be paused because your income will likely drop below the minimum threshold (or you will be considered in an “in-school” deferment status). During this time, your payment obligation is $0. However, the months spent in grad school typically do not count toward your required number of payments, extending the duration of your contract.

No. According to Edly’s program documentation as of 2025, availability varies by state due to differing state regulations regarding consumer lending and income share agreements. You can check current state eligibility directly on the Edly application portal during the pre-qualification step.

Yes. You can extinguish your Edly obligation early by paying the Payment Cap amount (minus any payments you have already made). There is no penalty for prepayment, but unlike a traditional loan where paying early saves you interest, with an ISA, paying early usually means paying the full agreed-upon cap amount.

To further research your financing options and ensure you are making the best choice for your financial future, utilize the following resources:

• College Finance Guide to ISAs: A deep dive into how Income Share Agreements work across different providers.
• Private Student Loan Comparison: Benchmark Edly’s terms against traditional lenders to see if a loan offers a lower total cost.
• Federal Student Loan Guide: Ensure you have maximized all federal options, including Direct Subsidized and Unsubsidized loans, before signing a private contract.
• Edly’s Student Portal: Visit Edly directly to access their specific payment calculator and current partner school list.