StepEx for finance teams
StepEx turns a payment-timing problem into enrolled, fee-paying students without your institution lending, discounting or carrying on a regulated activity. You keep the repayment risk on your own students, as with any deferred fee; StepEx assesses, lends, collects and reports, and takes its fees from what is collected. This page sets out how settlement works, who carries which risk, what a deferred-fee student is worth, and the controls you keep.
This page is written for education providers' finance teams. The figures on it are illustrations of provider economics, not an offer of credit. Students: the cost of finance for your course, with its representative example, is on your provider's page
How settlement works
StepEx does not pay course fees upfront. When a student's finance is approved and signed, the fee is settled through the student's credit agreement with StepEx, with effect from the 1st of the month after signing or the 1st of the course-start month if later. StepEx then collects the monthly repayments and passes your share of each one to you: 95% of each repayment collected, or 93% where the agreement needs income monitoring, subject to the minimum servicing fee per repayment in the standard pricing schedule. Payouts are made monthly, on the terms in your services agreement, with a statement in the provider portal.
Illustration (provider economics, not an offer of credit or a representative example). A £10,000 fee financed over 36 months with £11,000 payable in total means repayments of £305.56 a month. Of each repayment collected you receive £290.28 and StepEx retains £15.28. Over the full term that is £10,450 to you against a £10,000 fee, before the origination fee and the monthly account fee in the schedule, and before any repayments the student does not make. Any amount you receive above the fee is compensation for being paid over three years rather than upfront; discounted and after defaults it is worth less than the fee paid upfront, as the next section shows.
Who carries the repayment risk
You do. StepEx is paid from what it collects, so if a student stops repaying, your receipts on that agreement stop too; StepEx's exposure is limited to its fees. In return, you decide the commercial eligibility criteria for your courses, including whether to accept applicants StepEx places in its low likelihood-to-repay band, and, within the regulatory bounds StepEx sets, terms such as the repayment length and the cost of credit. Every student is identity-, affordability- and credit-checked by StepEx before a place is filled, and StepEx's own checks cannot be overridden.
What a deferred-fee student is worth
Take a £10,000 fee paid over 36 months with £11,000 payable in total, an 8% a year discount rate and a 5% default rate, with StepEx's 5% servicing fee and £250 origination fee from the standard schedule. The present value of the repayments to you, after those fees and after expected defaults, is about £8,560. What that is worth to your institution depends on which seat the student fills:
- A seat that would otherwise stay empty: about £8,060 after the incremental cost of teaching one more student (typically 5% of the fee, from StepEx's industry survey).
- A seat that would otherwise go to a student paying upfront: about £560. The upfront payer would have cost around £2,000 to acquire, whereas the financed student is already in your pipeline and carries no further acquisition cost; without that, substitution is a cost of about £1,440. Finance shown only where it converts demand you would otherwise lose keeps you in the first case.
- A seat that would not otherwise exist, such as an extra place on a distance-learning course: about £7,810 after the incremental cost and a £250 share of fixed costs.
Put your own fee, acquisition cost, discount rate and default assumption into the calculator Figures are illustrations of provider economics, not an offer of credit; the finance terms for each course are on its provider page with their own representative example.
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 |
Controls you keep
- Which courses, fees and intakes are eligible, which repayment products to offer, and any provider-specific eligibility rule, including your appetite for low likelihood-to-repay applicants
- Where StepEx-approved promotions appear in your journey
- Pricing: StepEx does not ask you to change it
- Monthly reporting and payouts through the provider portal, and aggregate conversion reporting under Managed Promotions
What StepEx will not do
- Guarantee an approval rate or a volume
- Tell you why an individual applicant was declined beyond the category of decision
- Share internal decision thresholds
- Change pricing or terms for one applicant
- Let an eligibility rule override its identity, affordability or creditworthiness checks
Pricing
A monthly account fee, an origination fee per originated agreement, a servicing fee on collections, and no charge for a course-only referral. The current schedule is at /standard-business-terms; the figures that apply to you are in your services agreement.
Questions finance teams ask
What if StepEx were unable to continue operating?
Live credit agreements are assets of StepEx Lender Ltd and would continue to be serviced or transferred under the existing wind-down arrangements StepEx has in place, in line with FCA rules. Repayments already passed to you are yours, and your share of repayments collected on live agreements would continue to be passed to you under those arrangements.
Who carries the repayment risk?
You do. StepEx is paid from what it collects, so its exposure is limited to its fees. In return you set the commercial eligibility criteria and, within the regulatory bounds StepEx sets, terms such as the repayment length and the cost of credit.
Can we pilot on one course or intake first?
Yes. Eligibility is set per course and intake, so a pilot is a configuration choice, not a separate contract.
What reporting do we get?
Monthly collections and payout reporting through the provider portal for every provider, and an aggregate conversion and drop-off dashboard under Managed Promotions.