Boston – 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.
MassDevelopment’s ETF provides low-cost, long-term venture debt to early-stage, emerging technology companies. 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.