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MyRichUncle

Page history last edited by PBworks 11 years, 10 months ago

My Rich Uncle

 

 

see also: student loan , credit-worthy, raising money

 

 

 

Is a publicly traded company. NASDAQ: UNCL

 

MRU Holdings for offering both private and federally guaranteed student loans.

 

History

 

Co-founders Raza Khan and Vishal Garg incorporated MyRichUncle's parent company (previously Iempower Inc., today known as MRU Holdings) in 1999 as an auction-exchange program where individuals could sell shares in their future income to investors, thereby bringing equity financing to the individual level. The firm narrowed its focus to investment exchange on college students, and launched its education investment program in spring 2001 as MyRichUncle. Rather than incurring debt, students who meet the necessary requirements could acquire college financing in exchange for promising investors a percentage of future earnings over a fixed period of years. The response to the product was greater than the current level of financing MyRichUncle had available. Following an unsuccessful attempt to secure greater financing for its equity financing model, MyRichUncle started exploring the traditional student loan market. The Company began originating student loans under the MyRichUncle brand in May 2005.

 

The Company launched Preprime™ student loans in May 2006. Preprime student loans are underwritten using MyRichUncle’s proprietary underwriting models in order to qualify students who lack credit history and credit worthy co-borrowers for a loan using student-centric criteria.

 

The Company launched Federal student loans in June 2006, offering immediate upfront discounts starting at repayment to all borrowers.

 

 

On July 21, 2004, they became a public company by the name of MRU Holdings, Inc. (symbol: MHOI.OB). Three months later, on October 25th, they raised $50 million for their own guaranty agency. By February 2005, they had raised $300 million to provide private loans to students from Nomura, one of the top ten global investment banks with $286 billion in assets.

 

 

 

Controversies

 

As a lender, MyRichUncle has taken an activist role critical of practices in the student loan industry between financial aid offices and lenders. In 2006 MyRichUncle drew attention for publishing a New York Times advertisement accusing financial aid administrators of taking "kickbacks" from lenders in exchange for a place on their "preferred lender" lists. In January 2007 the New York attorney general began an investigation to uncover relationships between schools and lenders.

 

On February 12, 2007, MRU Holdings purchased Embark, a provider of enrollment management services to colleges and universities, from The Princeton Review. In March 2007, Princeton Review named MyRichUncle its exclusive student loan partner, replacing Chase, drawing criticism from some college admissions officials

 

Recognition

 

  • MyRichUncle was listed as number 16 among Fast Company's 2006 Fast 50.
  • Raza Khan and Vishal Garg, co-founders, were featured as BusinessWeek's Tech's Best Young Entrepreneurs.
  • MyRichUncle is featured in "Footing The Tuition Bill, The New Student Loan Sector," edited by Frederick M. Hess and college marketing textbook "Marketing, real people, real choices (5th edition)" by Solomon/Marshall/Stuart, published by Pearson Prentice Hall.

 

Links

 

*MyRichUncle official site

*Student Lender Woos Borrowers With Low Rates, Wall Street Journal, June 15, 2006.

*Student lender leverages loan scandal, Reuters, May 23, 2007.

*Raza Khan and Vishal Garg The New York Times Agency Photos.

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