A startup that finances the education of foreign students at U.S. universities is planning an expansion after partnering with a Wisconsin bank.
MPOWER Financing announced a deal Tuesday with the $200 million-asset Bank of Lake Mills that will enable the Washington, D.C.-based company to lend to students in all 50 states.
Previously, MPOWER held lending licenses in 14 states, mostly on the East Coast, according to CEO Manu Smadja.
“This really allows us to reach out to demographics across the U.S., and particularly in places like Texas and California,” Smadja said in an interview.
While MPOWER is now allowed to make loans nationwide, the company is still restricting access to students at a select number of universities. Students at 223 schools are currently eligible, up from 87 previously.
MPOWER is looking to fill a largely ignored niche in the U.S. student loan market. The firm lends money to both international students and students who arrived in the country as undocumented immigrants and later applied for the Obama administration’s Deferred Action for Childhood Arrivals program.
Students who don’t have U.S. passports are ineligible for federal student loan programs, and they often cannot qualify for a private student loan from a bank because those loans typically require co-signers with well-developed credit histories in the United States.
MPOWER also finances the education of certain U.S. students who may not qualify for private student loans from banks.
Since its founding three and a half years ago, MPOWER has received applications for about $250 million in loans, though it has funded less than 10% of that application volume. Last October, the company announced a $6 million equity funding round.