How StepEx works for education providers
Tuition finance for UK education providers. We lend and collect. You're paid as students repay.
Your services agreement is with StepEx Lender Ltd, which is authorised and regulated by the Financial Conduct Authority (FRN 824928) and makes the loans to your students.
Why upfront payment suppresses demand
People don't only drop out at the payment page. Many never apply because they assume they can't afford the fee, and some accept an offer and then quietly withdraw when the invoice arrives. A finance option that is visible early, from a regulated lender, keeps those people in the process.
In the StepEx trial, the share of finance applicants who completed their application rose from 55% to 78%, a 23-percentage-point increase. Results vary by provider, course and cohort.
How a student journey runs
- You confirm eligible courses. You tell StepEx which courses, fees and intakes are eligible, and StepEx builds your provider page on stepex.co with the finance options and the required representative examples.
- Your team signposts. Admissions and marketing place the promotions StepEx has created and approved, and point applicants to StepEx for finance questions. Your staff don't explain terms or recommend borrowing.
- The student applies to StepEx. Identity, affordability and creditworthiness checks, plus any eligibility rules you have set. The full cost is shown before the student signs. Approval is not guaranteed.
- You confirm the place. For some applications StepEx asks you to confirm course and fee details. You have 14 days to do so.
- Settlement, then StepEx collects. From the 1st of the month after the student signs (or the 1st of the course-start month if later) the fee is settled through the credit agreement. StepEx collects the repayments, handles arrears, credit reporting, statements, complaints and support if the student's circumstances change, and passes your share of each repayment to you.
For your finance team
- Paid as collected. StepEx does not pay course fees upfront. You receive your share of each repayment StepEx collects: 95%, or 93% where the agreement needs income monitoring, subject to the minimum servicing fee per repayment, paid monthly on the terms in your services agreement.
- You carry the repayment risk. If a student stops repaying, your receipts on that agreement stop too; StepEx's exposure is limited to its fees. In return, you set the commercial eligibility criteria and, within the bounds StepEx sets, terms such as the repayment length and the cost of credit.
- Pricing. A monthly account fee, an origination fee per originated agreement and a servicing fee on collections. The figures that apply to you are in your services agreement.
- Your own numbers. Model the effect on your intake in the demand uplift calculator.
Who carries which risk
| Risk | Carried by |
|---|---|
Consumer-credit regulation, affordability and creditworthiness decisions | StepEx |
The student not repaying | You. Your receipts follow what StepEx collects. StepEx's exposure is limited to its fees. |
Collections, arrears, credit reporting and enforcement | StepEx |
Complaints about the finance | StepEx |
Complaints about the course, withdrawals and refunds | You |
Claims by a student about the course (breach of contract or misrepresentation) | You. Because the finance is linked to your course, the Consumer Credit Act makes StepEx jointly liable to the student for such claims where the course costs more than £100 and no more than £30,000, and StepEx is indemnified by you under the services agreement and the complaint-handling schedule. |
Applicants declined on affordability or credit grounds | You lose that enrolment; StepEx does not override its decisions for commercial reasons |
Substitution: a student who would have paid upfront choosing finance instead | You, as a timing and fee cost; mitigated by where and how finance is promoted |
Reputational risk from how finance is presented | Shared; StepEx creates and approves every promotion for that reason |
For admissions and marketing
- What your team does. Your staff place finance promotions StepEx has created and approved, and point applicants to StepEx for finance questions. They don't describe terms in their own words, recommend borrowing or help with an application. Read the staff guide
- StepEx Core, for every provider. Your provider page and application journey, origination and decisioning, borrower servicing and repayment collection, credit reference agency and regulatory reporting, the provider portal with monthly reporting and payouts, and arrears and enforcement handling.
- Managed Promotions, an optional add-on. For courses offering the payment plan: approved promotions for the places in your journey where applicants consider affordability, a named StepEx finance expert who takes applicant calls and callbacks, follow-up for applicants who pause, and an aggregate conversion dashboard. £1,000 a month plus £25 per originated agreement, in addition to the standard origination fee, on a two-month notice period while the service is new.
Who does what
| You | StepEx |
|---|---|
Admissions decisions and course delivery | Credit, affordability and identity checks |
Which courses, fees and intakes are eligible, and which repayment products to offer | The regulated credit agreement with each student |
Where StepEx-approved promotions appear in your journey | Creating and approving every promotion |
Confirming course details when asked | Collections, statements, credit reporting and payouts to you |
Course complaints, withdrawals and refunds | Finance complaints, arrears and financial-difficulty support |
Three ways students can repay
StepEx offers three repayment products. You choose which to offer on each course; which suits you depends on your objectives.
Payment plan. The financed amount is repaid in equal monthly instalments over a set term, with the charge for credit shown in the representative example for the course. The simplest for students and for your finance team to understand and forecast, and typically the first option a provider launches.
Payment plan with a minimum income threshold. Equal monthly instalments that are not due for a month in which the student's gross income for the previous month was below the minimum income threshold in the agreement. Because repayments are not due in low-income months, more applicants can show the repayments are affordable, and students have a built-in safety net in months of low earnings, which many see as a positive. The trade-off is that receipts are harder to forecast and repayment periods can lengthen with graduate outcomes.
Future earnings agreement. The student repays a share of the previous month's gross income in months where that income is above the minimum income threshold, for a set number of repayment months after the course ends, up to a maximum repayment cap. A strong signal to applicants because repayments follow outcomes, so it suits providers confident in their graduates' earnings. It is the most complex to forecast and to explain, for students and for finance teams.
Under every product StepEx makes the lending decision and approval is not guaranteed.
Before you decide
StepEx finance suits providers with a defined fee, a confirmable place and a cohort who would enrol if the fee could be spread. It does not change who you admit, and it does not remove every drop-out: some applicants will be declined on affordability or credit grounds, and you should expect that.