How do you make lending decisions?

In order for us to lend to students without a co-signer - we have to borrow money ourselves. Because we are a new Company, and almost no one except the government gives loans without a co-signer, we have to use historical data to demonstrate to our lenders that there is a high likelihood that Funding U borrowers will make their payments. To do this, we use a lot of historical information about federal student loans and the attributes of borrowers who pay back those loans.

About our lending decisions

Largely based on the attributes of successful federal student loan borrowers, our credit model takes into account a number of factors, especially:

  1. Your academic success in college (especially in your major), your likelihood to graduate on-time by taking and passing about 15 credits per semester, your projected total student debt, and your projected earnings based on your major
  2. The historical data of other students who attended your school.
So, for students with fewer college academic hours completed - you don’t have as much information about your progress – simply because you haven’t been in college very long; so, we consider data about your school and its alumni,  such as how many students proceed each year (known as retention rate) and how many graduate on time and get jobs. For students who have completed more hours - you have built an individual college track record; so, we can rely more on what you have accomplished as separate from your school and its graduates.

Funding U determines eligibility using our proprietary SMaRT™ scoring system. SMaRT™ (Student Merit and Risk Test) relies on non-credit variables incorporating 40 years of research. All such data points conform to the Federal Equal Credit Opportunities Act. The SMaRT™ scoring system is designed to predict the probability of an undergraduate college student defaulting on his or her student loan.

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