Income Sharing Contracts - Like Angel Investment in People


Traditional loan pricing is obsolete. Many students have had limited interaction with the financial system meaning low credit scores. Their future earning potential will change based on the ‘use of funds’ and the qualification they are enrolled in, making credit scores a poor predictor of the likelihood of repayment.


Graduate income is low and volatile in the near term. Repayments are least affordable, with defaults common early in the repayment term when investors have the most to lose. Typically funders have responded by increasing interest rates which makes repayments less affordable causing increased defaults.


Investors bear the risk of underperformance but none of the benefits of overperformance. If a borrower underperforms, investors will lose their entire investment. However, if a borrower performs better than expected, they will never be repaid more than the agreed upon coupon rate.

Income Sharing Contracts are a unique personal credit instrument in which investors can lend capital to borrowers in return for a proportion of future income over a defined period. They are a new non-correlated, high yield asset class that provide investors with an attractive hedge against macroeconomic shocks and a market beating risk return. (We offer a range of investment products for any risk profile).
Your investment will be used to fund part of a qualification that will provide an individual with a higher income profile in future which you will get a share of. > Learn more about our Investment products.


Student Finance and Graduate Income

This opportunity is based on two factors, the demand for qualifications and the potential of industry earnings that require those qualifications.

In 2019, StepEx is focusing on professional and business post-graduate (Master's) degree students. These are typically the highest cost qualifications with the highest and least volatile post-graduation earning trajectories.


  • There is currently an unmet demand for higher level qualifications in the U.K. labour market. A recent report found an undersupply of graduates in the economy. 34% of jobs require a higher education degree, however, only 26% of the working age population have such qualifications.

  • There are 122,000 students enrolled in business or professional post-graduate degrees in the UK. 81% of all higher education students in the country come from the U.K.

  • Oxford and Cambridge University are consistently ranked first and second respectively in university rankings, however, London School of Economics graduates have the highest median annual earnings five years after graduation of any U.K. university.

  • ~1.3 Million (47%) U.K. university students currently do not receive government funding. An estimated £30 Billion is spent on higher education annually.

Industry Income

  • The unemployment rate of graduates in 2015 was 3.1%, half that of non-graduates. Moreover, the post-graduate unemployment rate was ~2%, almost a percentage point lower than students with a graduate degree. Additionally, the median salary for post-graduates was nearly £6,000 more than those with a graduate degree (for those aged 16-64).

  • Post graduates have experienced a consistently lower unemployment rate than graduates over the last ten years.

  • ”The annual income for graduates increased at a fast pace as they became older and more experienced in the workplace, before levelling out around the age of 39 at an average of £35,000” (ONS).

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