Accelerator at WGU Labs and Funding U Partner to reshape student lending


SALT LAKE CITY–()–WGU Labs Inc., a subsidiary of the non-profit online university Western Governors, today announced an accelerator partnership with financing anda financial technology company serving low-income students long ignored by traditional lending institutions.

Funding U has turned the FICO-based lending model on its head by focusing on student academic achievement rather than generational wealth. Through its groundbreaking SMaRT™ analysis, which focuses on non-credit factors within student control, Funding U provides “last-gap” microcredits ranging from $3,000 to $10,000.

“Last gap” microcredits are an important source of bridging financing, allowing students to graduate from college without meeting a FICO threshold or having to rely on a co-signer — traditional borrower requirements that often force students without strong credit histories to take the dropping out of school, perpetuating the seemingly unsolvable gap in college opportunities.

“Getting a college degree is a complex puzzle, especially for low- and middle-income students who have to pay for their own way to school,” said Jeannie Tarkenton, Founder and CEO of Funding U. “We want to solve part of that puzzle by removing barriers to funding for Students who are routinely dismissed by banks as not worth the risk.”

After demonstrating the creditworthiness of its first cohort of students, 65% of whom are Pell-eligible, Funding U hopes to further refine its SMaRT™ scoring system to open credit markets to hundreds of thousands of students who need gap funding, but are unable to secure a co-signed loan. WGU Labs will help Funding U identify and reach more students who can benefit from their services.

“Banks and other lenders have historically been neutral players in a credit market blind to social injustice,” Tarkenton said. “We now expect these gatekeepers to help level the playing field for students who are always struggling uphill.”

“Funding U challenges lenders to redefine how they evaluate student borrowers,” said Todd Bloom, managing director of the Accelerator at WGU Labs. “We strive to demonstrate the sustainability of rewarding students for their hard work and perseverance, not family fortunes.”

Funding U is the eighth partner to work with Accelerator at WGU Labs since its inception in 2019. To learn more about Accelerator at WGU Labs and its partners, visit www.wgulabs.org/startup-services.

About WGU Labs

WGU Labs is a non-profit subsidiary of WGU. Accelerator at WGU Labs provides research, market development, and product improvement services for early-stage educational companies. Through these services and financial investments, the Accelerator fuels the scale and impact of education companies that share its mission to improve student access, reduce student costs and improve student outcomes. Learn more about WGU Labs and the Accelerator at www.wgulabs.org/startup-services. Follow WGU Labs on Twitter and LinkedIn.

About the funding of U

Funding U was founded in Georgia in 2016 and has operated nationwide since 2018. To date, Funding U has provided $6.8 million in loans to 812 students enrolled at colleges and universities in the United States. Almost 40% of these borrowers are first-generation college students. The company uses its proprietary SMaRT™ scoring software to provide loans that students earn based on hard work, persistence and focus, and not based on the income level or creditworthiness of a co-loan signer. Learn more here. Keep following Funding U Twitter and LinkedIn.

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