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UP Alumni Engineers, InvestEd launch country’s first income contingent loans for college degrees

With the pandemic and recession making job markets more competitive, young people need credentials and upskilling more than ever for job security. This makes access to quality higher education as important as ever. The problem is that three in every five Filipino households cannot afford to send their child to college.

In line with its mission to make quality education accessible for all, globally acclaimed impact business InvestEd has partnered with the University of the Philippines Alumni Engineers Association (UPAE). The partnership will launch income share agreements (ISAs) to students enrolled in the University of the Philippines’ College of Engineering (Diliman and Los Banos Campus)

How it Works: Study now, then pay after graduation based on your income

ISAs are a form of college financing where repayments are based on a percentage of a student’s future income. Unlike traditional student loans, ISAs do not accrue interest, making it much more affordable for students.

The funds are provided by alumni donors of the UP College of Engineering, through the UP Engineering Research & Development Foundation. Donors include alumni executives from top employers of engineering graduates such as DMCI Holdings, Inc., Globe Telecom, and prominent alumni families such as Bing & Elise Del Rosario.

With the program, UP Engineering students will be provided funding that can be used for tuition, allowances (e.g. dormitory, food & transportation), and other miscellaneous school expenses (e.g. projects, gadgets, etc.). Repayment will be purely based on a percentage of the students’ income post graduation. The percentage shall be customized to ensure affordability based on the students’ starting salary, family situation and career prospects.

To further push for affordability, a floor income and 1x cap shall be applied on the ISA. Repayment will only begin once a student achieves an income above the floor income set. For example, if floor income is set at 18,000 pesos and the student earns only 16,000 per month post graduation, he/she will not be required to start making payments yet. Furthermore, a 1x cap on the ISA means the student can stop paying once they have fully paid 100% of the amount borrowed.

The UP Alumni Engineers (UPAE) Association has partnered with InvestEd to design and implement the program. To-date, InvestEd is the lone company in South East Asia providing ISA outsourcing services for schools and philanthropic entities such as endowment funds, alumni groups, and foundations.

“This upgraded scheme for our Study Now, Pay Later program will benefit even more engineering students in the years to come. And our partnership with InvestEd will certainly have a long term impact on nation-building,” UPAE President Patrick Anthony Pascual said.

“For decades, philanthropic organizations and schools in the Philippines have been looking for ways to make their financing programs more affordable and accessible to students. Our launch of income share agreements will definitely push for this and will also allow the UP Alumni Engineers’ large endowment fund to increase its impact,” InvestEd CEO and UPAE Board of Trustee Member Carmina Bayombong said.

About UP Alumni Engineers Association

The University of the Philippines Alumni Engineers Association (UPAE) will be the primary organization that unifies the alumni of the UP College of Engineering (COE), providing linkage between the alumni and the COE, while promoting both to Industry and the broader community in general. UPAE will provide a venue for mutual cooperation and camaraderie among the membership even as it promotes the interest of the Engineering profession in general.

About InvestEd

InvestEd’s goal is to bring financial inclusion to millions of Southeast Asian Youth by 2030. It is starting with millions of youth in the Philippines who do not have access to affordable credit for their developmental needs, such as college tuition, post graduation upskilling, and small business ventures. A globally awarded impact business, InvestEd has helped thousands of low-income Filipino youth from 400+ schools increase their income and navigate success in a fast changing world. It has also managed more than $3M of funding from investors, lenders, and donors, including leading institutions such as Credit Suisse, ING Bank, and Australian Aid.