Study Loans to fund $50 million in student loans

Study Loans to fund $50 million in student loans

Aussie fintech now eyes $5 million Series A raise after signing debt facility as government cuts back education funding

Education fintech Study Loans will inject $50 million into Australia’s growing student loans market as the federal government cuts back on post-high school education funding.

Australia’s first private, dedicated provider of student loans, which uses data mining to reduce the cost of education finance, has secured a $50 million debt facility to fasttrack its move into Australia’s growing students loans market. The company is also launching a $5 million capital raise, backed by the megabuilder Simonds family.

With the federal government increasing restrictions on student loans to ease pressure on the budget and the big banks offering only personal loans for education, there’s growing concern that Australian students will be unable to fund their education without the right provider.

Study Loans has already partnered with more than 60 education institutions and aims to have this number at 250 by the end of the year including universities and TAFEs.

“We are committed to revolutionising the way Australian students can access education, because the federal government’s ability to support and grow education by itself is receding,” said Study Loans Co-Founder and Chief Executive Brett Shanley.

“We want to ensure all Australian students have a pathway for learning and the financial assistance they need to make this a reality.”

Survey says government cuts are spooking students

The total value of the federal government’s student loans is expected to grow from $60 billion in 2016 now to $185 billion by 2026, according to the Parliamentary Budget Office.

The federal government has cut costs by capping FEE‑HELP loans for students and replacing the VET FEE-HELP scheme with a stricter model known as VET Student Loans.

The result is more than 51 per cent of past and prospective Australian students believe that any plans to upskill or gain a qualification in the near future will be thwarted by a lack of access to finances or financial assistance, according to a study last month.*

Study Loans uses data mining to project completion rates and the likelihood of achieving employment from qualifications for prospective students. This insight allows the fintech to deliver competitive, responsible loans tailored for post-high school education.

Unlike personal loans that come in one big block, Study Loans delivers finance to students in tranches that match their incoming bills from the education provider. This reduces the interest burden on the student.

Simonds family backs Study Loans again; debt deal is a game changer

Study Loans is also launching a $5 million Series A capital raise to go with the $2 million it raised last year with the megabuilding Simonds family and RMY Group as cornerstone investors.

Study Loans is conducting the $5 million capital raise independently from a private network of institutional and sophisticated investors. It will use the funds for launching a accelerating growth, enhancing data capabilities and improving the application process for students, whilst also launching a major B2C marketing campaign in the later stages of this year.

The Simonds family behind the megabuilder Simonds Group, is participating. The Simonds family was also a cornerstone investor in Study Loans’ $2 million capital raise in October last year, which helped launch the platform.

Meanwhile, the education lender has also secured a $50 million debt facility with an ASX200 finance company, which it will put to work writing loans to Australia’s forgotten students.

“The debt facility is a real game changer for us. It gives us capacity to lend more and to more popular courses, making more dreams of Australian students become a reality.”

Study Loans adds to its board

In the last six months, Study Loans has made several key appointments to help bolster its advisory board.

These include Ryan Meyer, the Asia Pacific senior regional director for education startup General Assembly; Jim Cock, ex GE Capital managing director for consumer and commercial finance in Australia and New Zealand, Marcus Oakley, founder and director of Advisory Services at Connected Analytics, and Allyn Radford, inaugural CEO at DeakinDigital, the credential provider that merged with corporate education and training provider DeakinPrime last year to create DeakinCo.

KEY STATS

  • Study Loans has now partnered with over 60 educational institutions and aims to have this number at 250 by the end of the year including universities and TAFEs.
  • Study Loans is targeting a total of 2500 loans on the platform by December 2018, equivalent to a loan book size of $25 million with an average loan size of $10,000.
  • By December 2019, the aim is to have this figure grow to $100 million in total loan book size and $500 million by 2022.

*Data in this release is taken from Pureprofile research conducted in partnership with StudyLoans. The study surveyed 1,000 Australians across the country aged between 16 and 40, split into categories to represent each age group and place of residence across that sample. 

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