A closer look at FinWise Bank and Earnest’s alliance to expand student loan financing
- FinWise's decision to partner with Earnest was fueled by their joint objective to offer private loan options to individuals pursuing higher education.
- With the student loan market growing more competitive, private lenders are vying for borrowers' attention. So, why would borrowers choose Earnest for financing over other options?
Utah-based community bank, FinWise Bank has partnered with fintech lender, Earnest, which offers education financing products. The partnership will enable the bank to broaden its customer base and help the fintech expand the reach of private student loans.
The bank’s role in the arrangement
Founded as a community bank in 2000, FinWise Bank has since repositioned itself into a partner bank. Serving customers directly, it maintains a single full-service banking branch in Sandy, Utah, along with a loan production office in Rockville Centre, New York. FinWise’s annual total assets have risen to $550 million in 2023 from $177 million in 2019.
Under the new partnership with Earnest, the bank will oversee the origination and disbursements of private student loans for Earnest, through the integration of its tools within the Earnest platform, according to Jim Noone, President of FinWise Bank. This means the partner bank will work behind the scenes on student loan applications. Moreover, it also takes on the responsibility to adhere to compliance with local, state, and federal banking regulations, including consumer protection laws.
Besides offering a suite of lending products for consumers and small businesses, FinWise has been partnering with fintechs and loan startups to expand access to educational financing for some time. In December, FinWise teamed up with Stride Funding to introduce an Innovative Employer-Sponsored Loan Program for Students. Stride Funding is a student loan startup, which offers a range of financing options, including income-share loans, deferred tuition loans, and traditional private student loans.
“FinWise has consistently invested and has been active in the fintech space for many years and it’s a core competency for us,” said Noone.
