Germany: CHANCEN eG receives European support for providing student financing
2 Dec 2021 11:37 AM
The European Investment Fund (EIF) has signed a guarantee agreement with CHANCEN eG covering a portfolio of up to €30 million of income sharing agreements (ISAs) to support students in Germany wishing to invest in their studies and upgrade their skills. The agreement is backed by the EFSI Skills & Education Guarantee Pilot, a debt financing initiative under the Investment Plan for Europe launched in 2020 to stimulate investments in education, training and skills.
- The EIF guarantee of up to €24 million covers a portfolio volume of €30 million.
- It will support students investing in education and training via income sharing agreements (ISAs).
- The agreement is backed by the EFSI Skills & Education Guarantee Pilot.
The EIF support will enable CHANCEN to back more than 2 000 students through ISAs. With an ISA, students only start paying for their education after they get a job and earn above a pre-determined minimum income threshold. This model removes potential financial barriers of accessing education, while aligning everyone's incentives towards helping students acquire the right skills to secure employment opportunities.
Thanks to the EIF guarantee, CHANCEN aims to substantially expand its ISA offering — three times more students are expected to be supported — and to broaden the scope of its operation by extending its financing to cover students' living expenses from 2022 onwards. The EIF will take on 80% of the risk of this financing.
European Commissioner for Jobs and Social Rights, Nicolas Schmit, yesterday said:
“Providing support to young Europeans is a fundamental aim of this Commission and goes to the heart of NextGenerationEU. Thanks to financial backing from the Investment Plan for Europe's skills and education pilot, the European Investment Fund is helping social business CHANCEN provide financing to three times as many students in Germany as before. I believe that with schemes like this, we will be able to achieve an inclusive and sustainable recovery.”
EIF Chief Executive Alain Godard yesterday said:
“We are delighted to partner up with companies and organisations like CHANCEN to support the education sector in Germany. Investing in university students means investing in our future, contributing to economic growth, competitiveness, innovation and employment. These are vital elements for ensuring an inclusive recovery from the COVID-19 pandemic.”
CHANCEN co-founder and CFO Olaf Lampson yesterday explained:
“This guarantee functions a first-loss protective shield. This is important for our investors, and therefore also for us: Because otherwise we would have to pay higher interest rates for our refinancing. And we would otherwise have to pass on these higher costs to our students as part of the ISA calculation.”
CHANCEN co-founder Florian Kollewijn yesterday said:
“The EIF attaches great importance to a broad range of training opportunities. This is fully in line with our vision: imagine a world where everyone is free to further their education and develop their full potential. In this respect we were immediately electrified when we heard about this EU programme.”
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