Question 1

What is StepEx?

Accepted Answer

StepEx is an education finance platform that enables UK education providers to offer regulated tuition finance to students, without becoming lenders themselves. Tuition finance is provided by StepEx Lender Ltd, a wholly owned subsidiary of Step Exchange Ltd, and an FCA-authorised consumer credit firm. StepEx provides the technology, regulatory framework, and servicing infrastructure behind the finance.

Question 2

Can StepEx change our course pricing or admissions criteria?

Accepted Answer

No. Education providers retain full control over: course pricing, admissions criteria, cohort size and availability, which courses are eligible for StepEx financing. StepEx does not influence academic admissions decisions.

Question 3

Does StepEx work with different types of education providers?

Accepted Answer

Yes. StepEx works with a range of education providers, including universities, bootcamps, and professional training providers, subject to eligibility and onboarding requirements.

Question 4

Who provides the finance?

Accepted Answer

Regulatory position (credit contract)
The student enters into a regulated consumer credit agreement directly with StepEx Lender Ltd, the FCA-authorised lender.
The education provider is not a lender, does not enter into a credit agreement with the student, and does not take regulatory responsibility for the finance.

Financial position (course fees and cashflows)
Once finance is issued and applied to the course fee, the financed portion of the course fee is no longer owed by the student to the education provider.
Instead, StepEx becomes responsible for settling that amount with the education provider.

This is achieved by StepEx granting the education provider an agreed economic share of the repayments collected under the regulated credit agreement entered into by the student (for example, 95%).

StepEx remains the lender of record, retains ownership of the credit agreement and all borrower rights, and is solely authorised and responsible for servicing and enforcement. The education provider's entitlement is limited to its agreed share of repayments and does not involve ownership of the loan or regulatory responsibility.

This means the education provider receives its agreed share of repayments as they are collected, rather than receiving the financed amount upfront at the point of enrolment.

Question 5

What happens if StepEx were unable to continue operating?

Accepted Answer

StepEx Lender Ltd is regulated by the Financial Conduct Authority and is subject to capital, reporting, and contingency planning requirements. StepEx maintains appropriate insurance policies designed to protect the servicing and collection of repayments StepEx owes. In addition, arrangements are in place for a stand-in authorised provider to continue servicing existing credit agreements in the unlikely event that StepEx were unable to do so. This is intended to ensure continuity of collections and ongoing management of the receivables portfolio.

Question 6

What happens if a student stops repaying?

Accepted Answer

StepEx is responsible for servicing and collections. As a regulated lender, StepEx manages borrower communications, repayment reminders, and, where necessary, formal collections processes in line with regulatory requirements. Payments to education providers are made from the portfolio of student receivables and are therefore dependent on overall repayment performance. Providers are not required to pursue individual students for payment and do not enter into a credit agreement with students.

Question 7

How are students assessed for eligibility?

Accepted Answer

Students apply directly to StepEx. Eligibility assessments are designed to ensure students are not put into financial difficulty and typically include: identity verification, affordability assessment, assessment of the likelihood of repayment. Depending on the product, StepEx may use a combination of credit reference data, bank transaction data (via Open Banking), and proprietary information and data to assess affordability in line with regulatory requirements.

Question 8

Do we need FCA authorisation to work with StepEx?

Accepted Answer

No. Education providers do not need to be FCA-authorised to work with StepEx. Depending on the arrangement: Providers may signpost students to StepEx using FCA-approved financial promotions, or Providers may operate under StepEx's permissions via an Introduced Appointed Representative (IAR) arrangement, where appropriate. In all cases, regulatory accountability for lending remains with StepEx Lender Ltd.

Question 9

Are we the lender of record?

Accepted Answer

No. StepEx Lender Ltd is the lender of record. The education provider does not issue credit, underwrite, or collect repayments. This separation is fundamental to the StepEx model.

Question 10

How does StepEx differ from internal payment plans?

Accepted Answer

Many providers offer internal payment plans, typically with: short repayment terms (often capped at 12 months), no interest or charge for credit, limited enforceability, and limited ability to assess repayment risk upfront. These structures often lead to: high monthly repayment schedules, lower repayment completion, increased delinquency, and revenue leakage over time. StepEx is structurally different: finance is regulated consumer credit, not an internal arrangement; applicants are assessed using credit reference data and bank transaction data (where applicable); repayment behaviour may be reported to credit bureaus, incentivising repayment; servicing and collections are handled by a specialist platform. The result is improved repayment performance and more reliable realised revenue.

Question 11

How does StepEx differ from traditional student lenders?

Accepted Answer

Traditional balance-sheet lenders typically: underwrite based on historic earnings and thin credit files, approve a small proportion of applicants, Often very high cost to the student, focus on upfront cash advances rather than enrolment conversion. StepEx is designed specifically for education: underwriting considers education-specific factors and post-education outcomes, providers can choose their target repayment risk profile, StepEx is often used alongside traditional lenders to serve the many applicants they decline.

Question 12

Do we control which courses are eligible?

Accepted Answer

Yes. Education providers control: which courses are eligible for finance, how much of the course fee can be financed, how many places per cohort are available for finance, the commercial parameters of the financing offer (within StepEx's regulatory framework).

Question 13

Do we control who is accepted?

Accepted Answer

StepEx Lender Ltd makes all regulated credit decisions. However, education providers retain full control over admissions and this provides effective control over who is accepted: set eligibility criteria for courses and cohorts, apply final enrolment decisions in line with their academic and operational policies. Credit approval and course admission remain separate decisions.

Question 14

How are course fees settled?

Accepted Answer

When a student is approved: 1. The Education Provider makes a course place available via StepEx. 2. StepEx provides this available place to the student. 3. Student enters into a finance agreement with StepEx Lender Ltd for part or all of the course fee. 4. StepEx settles the financed portion of the course fee with the education provider by transferring to them the majority of the receivables under the finance agreement (typically around 95%). 5. The student no longer owes the financed amount to the education provider but owes StepEx under a regulated credit agreement. 6. StepEx pays the Education provider their share of the receivables once collected. As repayments are collected: the provider receives its share of the receivable on an ongoing basis; for example, if £200 is repaid in a month, approximately £190 would be passed to the provider (illustrative only).

Question 15

When do we receive payments?

Accepted Answer

Payments are made monthly based on repayments collected from students, net of the agreed servicing fee. This creates a recurring revenue stream aligned with repayment performance.

Question 16

Do we need to guarantee repayments?

Accepted Answer

No. Education providers are not required to: guarantee repayments, underwrite credit risk, or cover student non-payment.

Question 17

What fees do we pay?

Accepted Answer

Typical fees include: a one-off setup fee, a per-transaction origination fee, a monthly platform fee. Full pricing is set out during onboarding.

Question 18

What reporting do we receive?

Accepted Answer

Providers receive reporting suitable for: admissions and operations teams, finance and revenue recognition, VAT and audit requirements. Reporting is available via the StepEx portal and/or API, depending on integration.

Question 19

Who handles student queries and collections?

Accepted Answer

StepEx handles: finance-related student communications, repayment servicing, arrears management, complaints relating to the finance agreement. Education providers remain responsible for: course delivery, academic matters, non-finance student support.

Question 20

Is StepEx only available in the UK?

Accepted Answer

StepEx works exclusively with UK education providers and operates under UK consumer credit regulation. However students do not need to be UK students.

Question 21

Where can we learn more?

Accepted Answer

For detailed commercial discussions or onboarding, speak with the StepEx team at info@stepex.co. For regulatory context, see Regulatory & Compliance.

Question 22

How long does it take to launch?

Accepted Answer

For most education providers, setup and launch typically takes 2–3 working days once commercial terms and course details are agreed. Timing can vary depending on: the number of courses and cohorts being set up, the chosen regulatory route (signposting or IAR), whether a standard portal setup or API integration is required. In almost all cases, providers are live within a few days rather than weeks. However, internal processes and sign-offs on the Education Provider side, can take significantly longer. We can assist you with explanatory collateral for this process including explainer material, modelling and forecasting templates and executive white paper drafts.

Question 23

What's required from you?

Accepted Answer

To go live with StepEx, we typically need the following: Course details (Courses to be made available for finance, including fees, start dates, and cohort sizes), Commercial parameters (Confirmation of how much of the course fee can be financed and the desired availability per cohort), Regulatory route confirmation (Whether you will signpost students to StepEx using approved financial promotions, or operate under an Introduced Appointed Representative arrangement where applicable), Branding inputs (Logo and basic brand guidelines for the student finance landing page), Operational contact (A primary contact for setup and ongoing reporting). No changes to your admissions systems, finance systems, or payment infrastructure are required unless you choose to integrate via API.

Question 24

Do we take repayment risk?

Accepted Answer

Education providers do not become lenders and do not take on regulatory lending risk. Under the StepEx model, providers receive a share of student repayments over time. This means providers are exposed to repayment performance, but StepEx Lender Ltd remains the lender of record and is responsible for underwriting, servicing, enforcement, and credit reporting.

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