Goldman Sachs Urban Investment Group provided a $10 million line of credit for Funding U, a merit-based student lender for college students. Funding U also received a $4 million equity round from Deciens Capital, Valor Ventures, MacKenzie Scott, Next Act Fund and The JumpFund.
The credit facility and equity round will scale operations and provide “last gap” loans, credit education and career networking for more than 1,500 students attending four-year colleges in the U.S. Funding U’s lending platform and AI analytics use academic and earnings data to provide responsibly priced products to borrowers whose parents can’t or prefer not to co-sign a loan.
“Traditional student loan decisions at banks are made based on co-signer FICO. This practice shuts out millions of historically underrepresented students seeking $3,000-10,000 loans every year to cover the last mile of college costs after financial aid, small-cap federal loans and grants,“ Jeannie Tarkenton, CEO and co-founder of Funding U, said. “Accessing a college degree is proven to increase earnings by $1 million over a lifetime, as well as stabilize employment in times of recession. Our borrowers and portfolio outcomes to date have proven that academic success, employability and earnings potential should be the factors that assess the risk of a student loan — not simply FICO scores or parent income level.”
“Rooted in our investment strategy of providing capital to close the opportunity gap for often-overlooked people and places, we are proud to partner with Funding U to expand their model of providing a path for high-achieving students with limited financial resources to pursue their dream of attending and graduating from college,” Margaret Anadu, managing director and head of the Goldman Sachs Urban Investment Group, said.
Goldman Sachs Urban Investment Group is a domestic, multi-asset class investing and lending business deploying more than $1 billion annually in community and economic development through real estate projects, social enterprises and lending facilities for small businesses.
