Future Potential Versus Past Performance: Mpower Financing's Innovation in Student Loan Underwriting
12 Pages Posted: 21 Sep 2016
Date Written: 2016-09-20
The Payment Cards Center hosted a February 2016 workshop featuring MPOWER Financing, a start-up public benefit corporation created to be a source of student loans for high-potential scholars who either do not qualify for federal aid or who face a gap between federal aid maximums and the full cost of their educations. MPOWER has taken a unique approach to loan underwriting that is based on future potential rather than past credit experience and has developed a scoring model that helps predict loan repayment for young adults who have yet to establish a credit history. This paper summarizes highlights from the MPOWER workshop.
Keywords: MPOWER, student loans
JEL Classification: D14
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