Future Potential versus Past Performance: MPOWER Financing’s Innovation in Student Loan Underwriting

Susan Herbst-Murphy

No 16-2, Consumer Finance Institute discussion papers from Federal Reserve Bank of Philadelphia

Abstract: The Payment Cards Center hosted a February 2016 workshop featuring MPOWER Financing, a start-up public benefit corporation created to be a source of student loans for high-potential scholars who either do not qualify for federal aid or who face a gap between federal aid maximums and the full cost of their educations. MPOWER has taken a unique approach to loan underwriting that is based on future potential rather than past credit experience and has developed a scoring model that helps predict loan repayment for young adults who have yet to establish a credit history. This paper summarizes highlights from the MPOWER workshop.

Keywords: MPOWER; student loans (search for similar items in EconPapers)
JEL-codes: D14 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2016-09-20
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