The McCormick Foundation, with Support from The Chicago Community Trust, Awards $1 Million Loan Loss Reserve to A.M. Money

A.M. Money, a student loan provider based in Chicago, has announced an agreement with the Robert R. McCormick Foundation to establish a $1 million loan loss reserve in support of high-performing, low-income college students who have not had access to traditional student loans. The reserve is made possible in part by support from The Chicago Community Trust. The reserve will allow A.M. Money to continue growing its affordable loan portfolio for this historically underserved group, while making it more attractive for outside investors to invest in A.M. Money’s expansion with reduced risk.

Unlike other lenders, A.M. Money does not require student borrowers to have good or substantial credit, nor does it require them to have co-signers. Instead, A.M. Money gives students loans based on the quality of the institution they’re attending, how many credits they’ve earned, and their GPA.

Both the McCormick Foundation and The Chicago Community Trust recognize that reducing the racial and ethnic wealth gap is crucial to building an equitable and connected Chicago region where all people have the opportunity to thrive. Access to education and safe financial products to pay for college are core pieces of this puzzle, and the work of A.M. Money is critical to this success.

In addition to their underwriting practices, A.M. Money does something else unique within the student lending space: they provide additional resources and support to borrowers. By utilizing specific data points, A.M. can identify risks and opportunities for students, and provide additional resources, programming, and partners that can place borrowers on a better track for academic, employment, and financial success.

For example, A.M. Money provides every graduate with 1:1 remote financial coaching through a partnership with The Neighborhood Trust, a national nonprofit organization.

This built-in support has paid off. Since launching in the summer of 2019, A.M. Money has seen repayment rates that are four times higher than those of comparable products, with zero defaults. They have also seen their borrowers compete with graduates from some of the area’s best colleges when it comes to job placement rates after graduation. 72% of A.M.’s class of 2020 found a full-time job within six months of graduation, compared to 70% at Northwestern University, 65% at Purdue University, 48% at the University of Illinois at Urbana-Champaign, and 46% at the University of Wisconsin-Madison.

To learn more about A.M. Money visit www.chicagostudentloans.com.