Nearly five years after its founding, CommonBond, the student loan startup conceived by a trio of Wharton MBA students, has now expanded its services internationally.
Through a partnership with Prodigy Finance, international MBA students who come to CommonBond seeking funding for their business school education in the U.S will now be able to secure funding through Prodigy, which will determine terms and conditions for the loans.
“In the time since our founding, we’ve developed a vision of having the broadest impact possible, and so while we originally started out focused on domestic students, it has continued to grow over time,” said David Klein, CEO and Co-Founder of CommonBond.
The partnership comes in response to frustration expressed by the international MBA applicants, approximately a 60,000 student market, over the limited loan options available to fund their post-graduate degrees. While domestic students have loan options available via the federal government and private banks, international students seeking to study in the U.S do not qualify for federal loans and are usually required to have a U.S resident with an above average credit score to co-sign.
“International MBA students in the U.S. face a unique set of challenges in financing their degrees, largely due to the shortage of funding options from traditional financial institutions,” said Klein. “We have long recognized the need for a solution which addresses this need. Now, thanks to our partnership with Prodigy Finance, we are able to make U.S. business schools more accessible and affordable for international students.”
Prodigy Finance, itself a 2007 startup founded by a trio of MBA students out of INSEAD, is a global platform that has been enabling international postgraduate students from most of the Financial Times (FT) Top 100 ranked business schools to attain funding. The platform is built on an innovative premise that provides business school alumni and other investors with competitive returns, while students simultaneously gain access to higher education they otherwise could not afford.
The system rests on an approach that starkly differs from the traditional method used by banks that make loan decisions based on historical salaries. Rather, Prodigy Finance utilizes a predictive model that determines loan affordability by assessing each applicant on the basis of their respective future earning potential – a potential itself based on the past achievements of similar graduates.
Cameron Stevens, CEO and Co-Founder of Prodigy Finance, says both the founding of the student loan startup and the inspiration for the community funding scheme are rooted in the struggle international students face finding loans.
“We understand firsthand just how difficult it is to finance an international MBA, which is why we launched Prodigy Finance eight years ago as a way of offering borderless loans to international MBA students while enabling investors to earn a competitive financial and a social return by investing in these students,” said Stevens. “We are excited about our partnership with CommonBond as it furthers our vision to create global funding options for international post-graduate students.”
With this new partnership, CommonBond will have access to Prodigy’s lending model that stretches across 150 countries globally. Since it’s founding in 2007, Prodigy Finance has processed over US$130 million, boasting repayment rates in excess of 99%. The financier has programs at more than 60 of the Financial Times Top 100 ranked b-schools – a number that promises to grow into the future.
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