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Aaron Pisacane 27 Aug 2021 1 min read

Alternative Data - Improving Credit Underwriting for Education Loans

College student risk becomes the cornerstone for credit underwriting at Einstein Higher Edu Solutions. 

Modernizing Credit Models for Student Loan Programs

Credit models that incorporates the risk profile of a college student will enable lenders to improve the credit risk assessment of student loan applications.  Student risk is as relevant or more relevant than the cosigner's risk.  My experience is that cosigners pay less than 10% of the time based on extensive private student loan portfolio data. 

The Einstein Risk Score uses alternative data to compile a student risk score so that lenders can improve lending decisions.  First, lenders can use the Einstein Risk Score to improve loan pricing models.  Next, lenders can use the Einstein Risk Score to improve credit decisioning of student loan applications with cosigners.   Going further, lenders can consider underwriting the lowest risk students without cosigners.   

Regulators are Concerned that FICO Leaves Too Many Americans Behind

By looking at the accomplishments of college students and other relevant risk attributes, access to credit is opened up at acceptable interest rates for students and at acceptable risk levels for lenders. Einstein Higher Edu Solutions seeks to be a catalyst to society by powering diversity and inclusion in our economic system.  

Don’t let your credit models remain obstacles to hardworking students to realizing their dreams.  Visit our website  to learn how Einstein Higher Edu Solutions can help you. 

For more information on the current regulatory climate for the push to democratize credit see the article by AnnaMaria Andriotis of the Wall Street Journal.