Climb Credit Risk-Share Loans
One thing that makes Climb different from many other lenders is our risk-share loan structure. You may be wondering why we use this model and what impact it has on schools and learners. So, we’ve put together a quick guide to help you better understand this aspect of our partnership.
Why do we use a risk-share?
At Climb, our mission is to make sure that the incentives of school and lender are aligned in a way that benefits all parties involved—especially the learner. And by having some skin in the game when it comes to graduate success, schools demonstrate their confidence in the positive effects their programs have on the people who complete them.
Aligned Incentives
At Climb, our mission is to make sure that the incentives of school and lender are aligned in a way that benefits all parties involved—especially the learner. And by having some skin in the game when it comes to graduate success, schools demonstrate their confidence in the positive effects their programs have on the people who complete them.
Positive effects for learners
1 Based on nearly 7,000 survey responses. The data points include Climb’s all-time survey respondents, with duplicate responders removed, that both: 1) reported to have graduated from their program and 2) reported both pre-program and post-program income data.
2 Based on roughly 600 survey responses of students. The data points include Climb’s all-time survey respondents, with duplicate responders removed, that both: 1) reported to have graduated from their program, 2) reported being unemployed prior to their Climb-financed program and 3) have obtained successful placement after attending their Climb-financed program.
3 Based on over 8,000 survey responses. The data points include Climb’s all-time survey respondents, with duplicate responders removed, that both: 1) reported to have graduated from their program and 2) reported both pre-program and post-program income data.
4 Above outcomes data refers only to programs that have based our career advancement ROI calculation.
Higher Approval Rates
Most importantly, this model allows us to approve more students with all FICO scores. Because we believe in the career-advancing power of our programs—and our school partners believe enough to truly invest in student success—we can approve and help enroll these students who may have been left behind with other lenders.
Improved access and enrollment
4 Enrollment increase stated by a full-online Climb partner school.
How does a risk-share work?
With traditional student financing options, lenders only serve students at the top of the credit spectrum, leaving behind a large portion of students. The only other options are to turn these students away or put them on an internal payment plan—which costs a lot of time and money to manage, puts all of the risk of student defaults on the school, and reduces the amount of up-front money the school receives.
With Climb, typically a portion of the tuition—or tuition advance—is sent to the school, recourse-free, when a student starts class. The rest is deferred and sent to the school once that student starts paying back their loan—ensuring that schools are invested in making their student successful.
