FinWise Bank and Stride Partner on Employer-Sponsored Student Loans

FinWise Bank and Stride Funding have joined forces to launch a program that enables students to obtain loans sponsored by their future employers.

This collaborative Employer-Sponsored Loan (ESL) program is designed to directly connect students’ education with their career progression and help reduce their post-graduation debt, the companies said in a press release on Thursday, December 14.

“The program is ideal for high-quality students willing to commit to working with employers after graduation in exchange for placement opportunities and financial support for their education,” said Stride Funding Founder and CEO Tess Michaels in the statement.

The new ESL program is an extension of the Income Share Agreement (ISA) Loan Program, another collaboration between the state-chartered Utah bank, FinWise, and Stride, a FinTech offering access to outcome-based financial products, according to the release.

In the ESL program, students apply for sponsorship through participating employers and, if accepted, receive support with loans from FinWise Bank, facilitated by Stride Funding, the statement noted. The employer then reimburses these loans as an employee benefit over a specific employment period.

The program is available for students in engineering, healthcare, and skilled trades, allowing loans of up to $65,000 per year and $130,000 per student, according to the release.

“The success of our pilot program earlier this year demonstrated strong demand for this innovative loan solution among employers and students,” said FinWise President Jim Noone in the statement. “By working with Stride, we have fine-tuned the offering to create a beneficial situation for students, employers, and schools, focusing on improving hiring and retention.”

“There’s a big move toward outcome-based financing,” Michaels told PYMNTS in an interview published in April 2022. “We are aligning the cost of education with the value of that education.”

The new solution comes at a time when PYMNTS Intelligence found that the financial pressure from federal student loan repayments is expected to impact the overall well-being of millennials, particularly their mental health.

Young borrowers are more concerned about repaying their student loans than inflation, according to the “Consumer Inflation Sentiment Report.”

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