EXCLUSIVE – Nearly a third of Americans have low FICO scores, and this can mean difficulties in securing loans to pay for higher education. It’s easy to see how this issue contributes to an ever-widening gap between rich and poor.

Student lending company Climb Credit is taking on this challenge by offering loans that share the risk with the educational institution. The company’s Climb Full Stack product has been in pilot at the American College of Education (ACE) for seven months, and last week expanded to 14 other schools. ACE branded the loan as the Achieve Loan, and offered students the opportunity to pay back their loan for a master’s degree for under $300 a month for three years.

The product is built on a risk-sharing model in which institutions — which after all must display some confidence in a student’s abilities in order to offer her admission — take the first risk by accepting a “scaled tuition advance” from Climb. This means in effect that the school is also on the hook for the loan, and the school and student are in it together.

This was expressed by Climb Credit CEO Zander Rafael, who said in a press release last week that his company’s goal is to “align the incentives for schools to the best interest of student.”

Climb is based in New York and says it partners with schools that improve graduates’ earning potential — which of course fits into its risk model. It finances education at more than 60 institutions of higher learning across the country. Among the company’s financing partners is Ferry Farm Capital.

To learn more about new lending models, request your invitation to Bank Innovation 2018, March 5-6 in San Francisco.