Education Finance Company MentorWorks Education Capital, Inc. Expands with Help From MassDevelopment's Emerging Technology Fund
July 21, 2020
FOR IMMEDIATE RELEASE
Louisa Stone, MassDevelopment, 857-283-3340 (cell)
Micha Sabovik, MentorWorks Education Capital, Inc., 617-758-8981
MassDevelopment has provided a $1 million Emerging Technology Fund (ETF) loan to MentorWorks Education Capital, Inc., a Boston-based education finance company that offers flexible alternatives to student loans. The company has developed a financing platform using Income Share Agreements (ISAs), which cover students’ up-front tuition costs and allows students to begin repayment once they secure full-time employment. MentorWorks will use loan proceeds to hire 19 new full-time employees.
“MentorWorks not only helps students navigate the challenges of debt, but also ensures future success through mentoring and career development opportunities,” said MassDevelopment President and CEO Lauren Liss. “MassDevelopment is proud to provide financing from our Emerging Technology Fund to help this forward-thinking company grow and continue to deliver this important assistance for students.”
MassDevelopment’s ETF provides low-cost, long-term venture debt to early-stage, emerging technology companies. Since its creation in 2003, the ETF has helped cutting-edge companies grow and expand in the Commonwealth, creating jobs and strengthening the innovation economy. The ETF has closed 60 loans and guarantees totaling $88.8 million through March 31, 2020.
MentorWorks Education Capital, Inc.’s alternative model of education finance aims to help lower-income students complete their higher education and build strong careers. MentorWorks’ Income Share Agreement (ISA) is a legal contract students can enter into to fund higher education such as undergraduate, graduate, and certificate programs. An ISA is an alternative to a loan; approved students will have their tuition paid for, and will then pay a percentage of their future income for a fixed period of time, up to a maximum cap, without incurring interest. In addition to this financing tool, MentorWorks also offers students mentoring, career development support, and access to employers.
“We are really pleased to partner with MassDevelopment,” said MentorWorks Education Capital, Inc. Co-Founder and CEO Karthik Krishnan. “With their backing, we are able to substantially enhance our ability to support students in higher education with flexible and non-loan financing and through our career enhancement Talent Accelerator Program (TAP) platform. MassDevelopment’s ETF is a great example of how capital support can be leveraged sustainably to promote innovation in the state.”
MassDevelopment, the state’s finance and development agency, works with businesses, nonprofits, banks, and communities to stimulate economic growth. During FY2019, MassDevelopment financed or managed 316 projects generating investment of more than $2 billion in the Massachusetts economy. These projects are estimated to create or support 9,743 jobs and build or preserve 1,992 housing units.