Earnest and Nova Credit Team to Offer Loans for International Students

FinTech Earnest has teamed with Nova Credit to offer private student loans for international students.

The partnership, announced Monday (July 17), is happening at a time when foreign-born students make up nearly 5% of the student population at U.S. colleges and universities, the two companies said in a news release.

“Beyond being accepted to these institutions, financing their study overseas is the most challenging step for students pursuing education abroad,” the release said. 

“While 50 percent of students fund their education through personal savings, family funds, or alternative methods, such as work-study programs, there is increasing demand for private loans to offset education costs.”

However, the companies say, access to loans is limited, largely because of a need for cross-border credit reporting across international markets.

With this program, Earnest will use Nova Credit’s Credit Passport tool to access “consumer-permissioned, cross-border credit data,” giving international students access to financial opportunities.

According to the release, the program is open to eligible international students from India, Mexico, Canada and South Korea who are studying for an MBA, law degree, or master’s in engineering at select schools. Loans can pay for tuition, housing, living expenses and other education-related costs.

The partnership is happening as federal student loan repayments are set to resume in October, with interest to begin accruing in September, after a three-year hiatus.

PYMNTS research has found that consumers who have federal student loans, and who were already balancing prevailing interest rates, inflation and declining purchasing power, will now have another financial responsibility on their plate.

The resumption of federal student loan repayments is concerning, even among those without federal student loans, as PYMNTS noted in “Consumer Inflation Sentiment: Back to School Means Back to Federal Loan Repayments.”

That report found that while just one-fifth of U.S. consumers held student loans, 54% of all consumers were at least slightly worried about having to make loan repayments.

Hardest hit among consumers are members of Generation X, whose average outstanding loans are $43,438, and whose payments represent 8.8% of their disposable income. 

“On a broad scale, this could be tough news for retailers and services catering to Gen X needs, as they will presumably soon have even less income to spend with,” PYMNTS wrote last month. 

“And although only time will tell what happens with this group in the coming months, the data seems to suggest that Gen X could find themselves cash-strapped longer than other age demographics.”