Students Flourish

A new take on credit scores for students

Dani Bicknell, NPLD 510

“Credit scores are broken…Students flourish is here to fix it.”

High Achieving Students

• Business Insider (4/9/2015) Group of students that got into all Ivy League schools have one thing in common: They are all first-generation Americans.

• How are they going to pay for college?

FICO Credit Score • The only score lending institutions have to make lending decisions • Not fair for students

Problem

Problem• Students have thin

or no credit, cannot receive competitive loans

Size• 20 million students

expecting to attend US colleges in fall 2015

Consequences• Students receive

inadequate financial assistance

• Current fed. loan structure gives all students same rate

• Students get negative return on education

Problem for Students

Cost of school

Limited funding options

Inability to attend

college of choice

Limited Funding Options for Students

Private Loans

Federal Loans

Financial Aid

Students ruin their credit before building it

Student debt is bad for the economy

Lenders need more information to make better lending decisions for students

• Lenders use FICO score to make lending decisions, this negatively impacts students who have no credit history

• Lenders need new data about students to segment the best student customers based on their behavior

• Big data takes into account new metrics for student behavior that could be used to make better lending decisions

Innovation

Students Flourish

Why it works

• Transparency• Big data captures

students• Students

voluntarily buy in• Banks can lend to

best customers

How it operates

• Algorithm that captures students credit risk

What success

looks like• Students get

score that lenders can use to make better lending decisions

A new kind of credit score that empowers students

Students FlourishA new credit score that empowers students by using data that tracks their behavior and segments customers to find the most competitive loan products

Accoun

t Creatio

n

• Download app and create profile (tablet, phone, computer)

• Agree to T&C and link accounts to Students Flourish profile

New

Score

• New algorithm captures data and behavior• Innovative credit score for students • More accurate score encompasses student

trustworthiness

Lenders

• Lenders have more accurate information about students

• Make better lending decisions to students• Expand services• Higher repayment rate • Advertise products on Students Flourish website

How it Operates

New way to determine eligibility

1.New credit score that takes in factors that will segment students

2.Segment best students and help find them better loans

3.Alternative risk assessment is better for students and businesses

4.New metrics: cell phone usage, social media accounts, financial accounts and online behavior

Competitive Position

Geography/Demographic•College bound students (undergrad and graduate)

Product•No other US company offers this product

Customer/client•Financially empower students with credit score to help them pay for college by expanding access to capital

Competitive Analysis Matric

Competitors Trait:New Credit Score

Trait:Focus on students

Trait: Financial education

Trait:Use online behavior to assess credit risk

Mint No No Yes No

Credit Karma Yes Yes Yes No

Lenddo Yes (but not in US)

No No Yes (but not in US)

Market Analysis• 20 million students estimated to attend college next year

• 67% who get into their first choice school can not afford it

• 13,400,000 million students cannot pay for their top choice school

Business Model Canvas

Revenue Channels

Banks• Sell score

Advertising• Credit Card• Universities• Financial

Services

Partnerships• Credit Karma• Mint• Nerd Wallet

For-Profit with a social mission

Advantages: • Product/service triggers social change through transparency,

and offering a high-impact low cost service to help students get the best financial products

• Easy to collaborate and partner with banks, businesses, and government

• Easier to scale• Attracts high-quality investors and employees

Financial Model• Model might limit some types of customers – segmenting

customers to find the best borrowers with the least amount of risk• Incorporate as a B-corp. • Show commitment by meeting comprehensive and transparent

social and environmental standards• Institutionalize stakeholder interests• Build collective voice through the power of the brand• Open 24/7: Online service and account allows convenience for

students

Performance Metrics

Mission• Social Commitment• Distributive Nature• Inspires students to

achieve without financial barriers

• Collaborative • Inclusive to high

achieving low-income students

Money• Focused objective• Operational

efficiency• Easy to scale

(within US)• High risk, high

reward• Leveraging the

market and consumers to find best products and services to suit their needs

Options to scale

Partnership and Collaboration with:• Government• Banks and Financial Service

Companies• Universities

Let’s help students flourish!