MPOWER Financing, which provides funding for international students attending US universities, secured $6 million in funding; the round was led by private equity firm, Zephyr Peacock India; the company will use the capital to enhance its technology and expand marketing efforts in emerging markets, especially India; in addition to providing loans the company also helps to build credit history of students and provides them with personal finance education to use in life after college. Source
Future Finance has received commitment for £30 million from the European Investment Fund (EIF) to lend to master's degree students supported by the Erasmus+ European program; Future Finance is a student lending platform active in the UK and Germany; Erasmus+ subsidizes career skills-driven education for over 300,000 higher education students across the European Union; EIF's commitment involves loan guarantees that will encourage investing and borrowing on Future Finance's platform; it has launched a "Call for Expression of Interest" targeting additional financial institutions that finance master's degree students crossing national borders in the EU. Source
First Republic Bank has acquired Gradifi, a student loan repayment technology platform; the platform offers technology that allows employers to make contributions to the student loans of their employees; an increasing number of employers have been integrating student loan contributions with their benefit plans; Gradifi will become a wholly-owned subsidiary of First Republic Bank and the acquisition will help it to meet the increasing demand for its technology. Source
An increasing number of employers are adding student loan services and contributions to their employee benefit programs; IonTuition.com is one provider for employer related student loan debt services; they have released a survey which reports that 87.7% of participants would consider a student loan contribution program from their employer to be an important benefit; 57.8% also said they were interested in online educational tools from their employer regarding student loan debt. Source
Student loan marketplace lender, Earnest, has completed its fourth securitization; Goldman Sachs and Barclays were the lead arrangers; portfolio valued at $174.44 million; the October securitization is the fourth for the year with previous securitization deals in February, May and July. Source
SoFi has partnered with Fannie Mae to help its customers pay down student loan debt using home equity; already focused on student loans, SoFi's new Student Loan Payoff ReFi will allow homeowners to refinance their home and simultaneously pay student loan debt; with home equity, borrowers can combine their mortgage and student loans to make one loan payment on their debt. Source
US legislators have proposed that student loan debt be discharged in the case of bankruptcy; the current law gives added protection to student loan lenders by requiring the debt to be repaid in bankruptcy; lawmakers and lobbyists are also considering other provisions that would provide debt relief to student loan borrowers who have filed for bankruptcy; while the debt relief initiatives will benefit borrowers, the effects will add increased default risk for investors in private student loans and private student loan securitizations. Source
Currently the student loan debt market is at approximately $1.4 trillion; market share from government lenders has been on the rise under the Obama administration with federal student loans accounting for approximately 93% of the market versus 88% in 2008; in the Trump administration it is likely that private lenders will take a larger share as Republicans favor more financing options from private sector participants; since the November 8 election, shares of private lender Sallie Mae have increased 55%; marketplace lenders are also likely to take part in a market shift towards private student lending, specifically as their student loan offerings continue to expand. Source
Climb Credit is integrating earnings potential into its credit underwriting models for student loans; firm offers student loans for individuals and through partnerships with educational institutions; its credit underwriting process for a student loan includes multi-factor data on the earnings potential of the loan's borrower in addition to the individual borrower's credit score. Source