Fintech lender Study Loans has announced that it has secured a $50 million debt facility from an unnamed ASX 200-listed finance company, which it will use to spearhead its entry into the Australian student loans market and become Australia’s “first private, dedicated provider of student loans”.
“The debt facility is a real game-changer for us,” Study Loans co-founder and CEO Brett Shanley said.
“It gives us capacity to lend more and to more popular courses, making more dreams of Australian students become a reality.”
The education finance provider noted that it aims to develop partnerships with 250 educational intuitions by the end of 2018, in addition to the 60 partnerships it has established.
Study Loans is aiming to deliver 2,500 student loans through its platform by December 2018, equivalent to a loan book size of $25 million with an average loan size of $10,000. The fintech added that it plans to grow its loan book to $100 million by December 2019 and $500 million by 2020.
The new player has also announced that it has launched a $5 million Series A capital raising initiative, in addition to the $2 million it raised in October 2017, with the backing of construction company Simonds Group.
The fintech lender noted that the capital raising initiative would be conducted independently from a private network of institutional and sophisticated investors.
Study Loans will reportedly use the funds to launch and accelerate growth, enhance data capabilities, improve the application process for students and launch a marketing campaign later this year.
“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,” Mr Shanley said.
“We want to ensure all Australian students have a pathway for learning and the financial assistance they need to make this a reality.”
According to the Parliamentary Budget Office, the total value of the federal government’s student loans is expected to grow from $60 billion in 2016 to $185 billion by 2026.
As a result, the federal government has cut costs by capping FEE‑HELP loans for students and replacing the VET FEE-HELP scheme with an alternative model known as VET Student Loans.
Study Loans conducted a survey of 1,000 Australians aged between 16-40 in May, which found that more than 51 per cent of past and prospective Australian students believed that any plans to upskill or gain a qualification in the near future would be thwarted by a lack of access to finances or financial assistance.
The lender uses data mining software, which it claims reduces the cost of education finance, and projects completion rates and the likelihood of a student achieving employment from qualifications for prospective students. This reportedly enables the fintech to deliver competitive, responsible loans tailored for tertiary education.
Over the past six months, Study Loans has also announced the following board appointments:
- Ryan Meyer: 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
- Allyn Radford: Inaugural CEO at DeakinDigital, a credential provider that merged with corporate education and training provider DeakinPrime in 2017 to create DeakinCo