Partnership Model

    LoanAmerica LIRS, Loan Institutional Risk Sharing Explained

    LIRS (Loan Institutional Risk Sharing) is the first risk-sharing model in private student lending. It aligns institutional incentives with student outcomes, expanding access while keeping lending disciplined.

    The Problem LIRS Solves

    Traditional private student lending creates a misaligned incentive: lenders bear all default risk, schools bear none. This means schools have no financial incentive to ensure their students succeed after enrollment, they've already collected tuition.

    LIRS (Loan Institutional Risk Sharing) changes this dynamic. Partner schools share in the performance of loans made to their students, so the school benefits directly when its students graduate, get licensed, and get hired.

    How LIRS Works

    1. Partnership: School partners with LoanAmerica and agrees to risk-sharing terms sized to its programs.

    2. Alignment: The school shares in loan performance, which ties institutional outcomes to student outcomes.

    3. Accountability: Programs with strong outcomes earn broader lending criteria for their students. Specific terms are discussed during the partnership review.

    Why LIRS Is Different

    Income Share Agreements (ISAs) attempted to align incentives but placed all risk on students through income-percentage repayment. LIRS keeps the loan structure simple for students (fixed rate, fixed term) while creating accountability on the institution side.

    For schools: LIRS transforms the lender relationship from vendor to partner. Schools that invest in student support services see the benefit of that investment reflected directly in their partnership terms.

    Frequently Asked Questions

    Learn More About the LIRS Model

    If you're a school leader evaluating lending partnerships, we're ready to discuss how LIRS creates better outcomes for your students and your institution.