Quarterly Reports

2018 Quarter 1

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This winter EEI worked closely with Chicago’s Academy for Urban School Leadership, AUSL, to design a unique and innovative funding plan for residents of AUSL’s Chicago Teacher Residency program, CTR. The Chicago Teacher Residency is a yearlong urban teacher training program that equips residents with the training and skills to impact classrooms. Click Here.

In addition to the scholarships offered by AUSL to the residents, EEI is now offering additional funding that is designed to make the residents participation affordable while providing a superior alternative to traditional student loans. This additional funding has been well received by the residents and has been a useful element for AUSL in recruiting the cohort they seek.

The scale of this program (100 residents per year) is a step up for EEI but one that fits perfectly in our plans for growth. The targeted aspect of this program and the consistent high-quality results make a perfect match for the returns we seek for our students and our investors.
We expect to fund 25 to 30 of the residents for 2018-2019.

EEI also continues to support and recruit other educators in the programs that we have had consistently good results with. These include Columbia Teachers College Summer Principal’s Academy, Harvard University Graduate School of Education, Lehigh University’s Urban Principals Academy, and The University of Illinois at Chicago’s College of Education’s Urban School Leadership program.

This spring we have one undergraduate earning her degree at UIC and one at Illinois State. These two maintain our record of 100% graduation from Bachelors programs. At the Masters level One will graduate from Harvard GSE, she will continue our perfect record on Masters degree completion. Finally we have our first two Doctor’s degrees. One as a EdD from UIC and One Medical Doctor from the Medical College of Wisconsin.

2017 Quarter 3

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During the summer of 2017 Education Equity, Inc.’s Cohort III of students, graduated from Harvard, Penn, Lehigh, Illinois State University, and Southern Illinois University at Carbondale.
All of them are now employed. Our Cohort IV began studies at Harvard, Lehigh and University of Illinois at Chicago. In September we invested our One Millionth Dollar in high-quality high- return education.

Education Equity, Inc. is no longer an experiment. We are now a successful demonstration of how EEI”s unique underwriting process combined with a seamless alignment of interest serves both students and investors well. The social benefits that our investments create are seen in the results at schools such as McCutcheon Elementary in Chicago’s Uptown neighborhood. In a neighborhood with more than its’ fair share of poverty and homelessness Gwyneth Kram leads a 1+ CPS rated school. Ms. Kram is one of six students that EEI has supported at The University Of Illinois at Chicago’s EdD in Urban School Leadership Program.

Now our task is to grow the business to a scale that is profitable and even more significant in its’ impact. Over the next six months our goal is to raise three million dollars in a “Series A” equity financing. This additional capital along with the one million plus we have already invested and combined with conservative debt issuance will allow us to invest over two million dollars annually in a group of over 100 students by school year 2019-2020.

Year end Report December 31st, 2016

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As of the end of 2016 EEI has invested $821,000 in thirty-seven students. All ten students in Cohort I are graduated, employed and in repayment. In Cohort II, twelve of the seventeen students have completed their degrees. Of those twelve graduates, eleven are employed and in payment. Five of the cohort are still in school. Two of those still in school, are working full time and in payment.

The ten students in Cohort III are all in school and on track. We have begun the identification of Cohort IV and have two UIC EdD candidates signed so far. The next student signed will be our fortieth student and will represent, when fully, funded our first million dollars of investment in cost effective higher education.

This year we added for funding, students attending The University of Pennsylvania, Southern Illinois University at Carbondale and Illinois State University. In this year we are also pleased by the growing career success of our students. Three are now Principals of Chicago area schools. Many are AP’s and hold other senior administrative roles in schools in Chicago, Denver, Georgetown, Massachusetts New Orleans and St. Paul, Minnesota. We now also have our first international placement, with one of our MIT graduates accepting an economic consulting job in London.

The most important aspect of our work this year has been the continued steady results of our investments as reflected in the academic and career success of the students we invest in. Measured by EEI’s share of the financial returns earned by the students we invest in, our model of highly predictable and low variance of income is validated by the data. Our model reverses engineers future results by using a top-down analysis of labor market and school placement data to guide our investments. It works.

Year two career data for our Cohort I students is beginning to reveal the longer term returns. In their second year of post-graduate work our cohort I is earning on average 15% more than in their first year.

These results will aid us as we seek the capital that will allow us to scale up and serve more students while we also achieve profitability for our investors.

Education Equity, Inc. Second Quarter Report 2016

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As of June this year, all ten students in Cohort I have completed the education programs that EEI helped fund. They have also each completed one year of employment. All ten were employed in the fields that they intended. Two in finance/ economic analysis and eight as educational leaders.

The seventeen students in Cohort II are all in the process of either seeking post graduation employment or in the case of the students at Lehigh University and Columbia University, weeks away from completing their final semester of graduate work. Of the seventeen students in this group, fifteen are focused on becoming K-12 education leaders, all are on track. Four have already secured employment for September.

We are now in the middle of recruiting and contracting with Cohort III. We will have students attending graduate education programs at Columbia University , Harvard University , The Johns Hopkins University , Lehigh University , University Of Illinois at Chicago, and The University of Pennsylvania.

Cohort III will also have some undergraduate students. In June, EEI signed a letter of understanding with The Golden Apple Foundation of Chicago. (GA) They are a well established and prestigious Foundation that operates programs that train and fund undergraduates that commit to teaching in high need Illinois Schools. Starting this summer EEI will offer our equity based funding to the third and fourth year students in the Golden Apple Scholars program.

GA selects students that attend any one of fifty Colleges and Universities across Illinois. In addition to special summer training while they are undergraduates, after graduation and on entering the teaching profession, GA continues to coach and mentor these scholars as they begin their careers as teachers. Data and experience shows GA Scholars persevering and succeeding as high quality teachers that perform better and longer than typical new recruits to teaching.

Even with the funding support that GA, Governments and institutions provide the students, there is often additional financial need. EEI has agreed to offer funding that should close this gap. We believe that our investment in these students will provide our investors with a return while also supporting a positive and powerful force for good in Illinois K-12 education.

In the second quarter this year we have made an investment in our intellectual property infrastructure with the redesign of our legal agreement for contracting with students. As the ISA business has evolved there has been a great deal of thought by Think tanks, researchers and foundations about the proper disclosure, equity and ethics of equity investing in student funding. Our contract continues to be a state of the art example of best practices in this new business. Our overall objective is to have a legal document that is understandable and equitable to both students and investors.

Education Equity, Inc. Fourth Quarter Report 2015

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In the fourth quarter of 2015, Education Equity, Inc. (EEI) continued to invest in our classes of 2014-2015 and 2015-2016, and began the process of identifying and recruiting our third cohort, the class of 2016-2017.

In the fourth quarter, EEI made additional investments of $77,000 in our student partners. This brings our total investment to $550,000, as of December 31, 2015. We have earned about $18,000 of return from our share of employment earnings, bringing our total net investment, as of year-end 2015, to $532,000.00

All ten members of our initial class of 2014-2015 are now employed and making repayments as planned. Not only are they employed and paying us, but we are proud of the work they are doing. Eight of the ten are employed in K-12 education here in Chicago. Two are non-citizens employed in the business world. Both of the non-citizens are typical of the bright, hard-striving people who have historically made immigration such an important and valuable factor in the growth and prosperity of the United States.

Our big news for the quarter is that we were able to bring discussions with our first Institutional investor to a successful conclusion. Subsequent to the end of 2015, during the first quarter of 2016, CME Group Foundation of Chicago became our first institutional investor, and our largest investor overall. CME Group Foundation’s total commitment to EEI is $500,000. CME Group Foundation is a philanthropic arm of CME Group.

CME Group is the world’s leading and most diverse derivatives marketplace, handling 3 billion contracts worth approximately $1 quadrillion annually (on average). The company provides a marketplace for buyers and sellers, bringing together individuals, companies and institutions that need to manage risk or that want to profit by accepting risk.

In 2016, our goal is to fund at least thirty new students in an aggregate amount of about
$750,000. We will pursue this goal through further incremental increases in our current relationships. We will also pursue at least one new program in partnership with an employer.

We will also update our legal contract to reflect the latest thinking in best practices.
These will include enhancements in consumer protection that will allow us to continue to claim industry leadership in fair dealings with the students in whom we invest.

Education Equity, Inc. Third Quarter Report 2015

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In the third quarter of 2015 Education Equity, Inc. (EEI) recruited two more students to our 2015-2016 Cohort Two. One of the additional students is attending Harvard Graduate School of Education. The other late addition is a second year medical student at The Medical College of Wisconsin,a new school for EEI. This brings the size of our Cohort Two to seventeen and our total number of students supported to twenty-seven.

In the third quarter we made further investment in Cohort One students of $10,002.00 and an investment of $63,846.00 in the seventeen new students of Cohort Two. This brings EEI’s total investment in students to $483,767 and a net investment of $473,000, given our $10,000 to date receipt of student earnings.

Of the ten students in our first years group, nine have now graduated and one is on track to graduate on schedule. Eight of the ten have entered repayment and we anticipate the other two will be in repayment by calendar year end. All ten students of Cohort One are employed in their intended fields, though one is “under-employed” and is still seeking a better position in her field.

In the quarter we raised $100,000 from new investors. While it was our goal, in the third quarter, to close our first investment from an institutional investor we have not done so. We have come to the very late stages of an extensive due diligence process and do believe this investment will close in the fourth quarter.

With our new banking relationship in place at American Chartered Bank, we are now collecting from our students as they enter repayment by using the banking industries ACH debit system.
This process allows us to automatically debit money on a prescheduled basis (typically coordinated with the students pay cycle) so that no action is required of the payer for the money to transfer to our account each month. This system is the best collection process that is available today. We are very pleased with the service and cooperation that American Chartered Bank has provided us. American Chartered is headquartered in Downers Grove, Illinois and specializes in banking Chicago area privately owned business.

In the fourth quarter our primary objective will be closing the investment from our first Institutional investor. This investment will allow us to expand our Cohort Three to forty students. This will be twice the size of Cohort Two and at an average of $25,000 of investment per student, will be a one million dollar investment.

Education Equity, Inc. Second Quarter Report 2015

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Report June 30, 2015

Contracted to support fifteen students for our 2015-2016 cohort and Invested $82,680.00 in those students.

Made final payments of $33,458.91 for members of Cohort 2014-2015.

Second Quarter total investments in students was $116,138.91

Raised $148,000 from investors as we approached the end of our initial $750,000.00 funding goal.

Operationally we opened a new banking relationship with American Chartered Bank of Downers Grove, Illinois. American Chartered specializes in banking privately owned Chicago area business. They will make available to us the ACH system. ACH is the banking industry protocol that will allow us to efficiently collect our investment returns from our students after they enter the workforce.

In the first quarter we reported that we were engaged with two institutional investors that were considering investing in EEI. As of now one of those investors has pulled out of discussions and one is moving forward. It is our goal to close that Institutional investment of $500,000.00 in the third quarter.

As the 2014-2015 academic year came to an end in the second quarter five of our students graduated in Cambridge, Massachusetts. Four earned Masters Degrees from Harvard Graduate School of Education and one from MIT’s Sloan School of Management. Two more will graduate from Columbia University in August. This combined with our previous graduates from Dominican University and MIT will bring our first year cohort results to 9 of 10 graduated. The tenth student is enrolled in a longer term PhD program at the University of Illinois at Chicago. That program allows candidates to work full time while in school and enter repayment in the second year of school.

By the end of the third quarter our goal is to be able to report strong placement results for all of our first year cohort members.

Finally we ask that you “hold the date” October 28th for a 5:00 to 7:00 reception in Chicago for all of our partners. Invitees will include students we have funded, investors, friends, vendors and counsel. The purpose will be simply to get to know one another and to better understand what each of the parties brings to and gains from working with Education Equity, Inc.

Education Equity, Inc. First Quarter Report 2015

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In the first three months of 2015 we have followed the progress of our 2014-2015 cohort of students closely as they approach the completion of their programs. All of our students are on track to complete their programs and enter the payment phase of our relationship. Our current projection is that we will receive just over $20,000 in shared earnings in calendar 2015.

This will represent the total of the contracted percentages of income we have with each individual most of whom will enter repayment in September, 2015.

We have also been actively recruiting for the 2015-16 cohort. The first school in the cycle is the University of Illinois at Chicago (UIC)which began their new year in January. We have funded an additional student at UIC’s EdD in Urban School Leadership program. He is an excellent candidate with a great record of teaching, coaching and school involvement at Fenger High School in Chicago’s Roseland community.

We will again fund students at Harvard’s Graduate School of Education as well as Columbia University Teachers College Summer Principals Academy. Both of these programs begin in the summer. We are also adding students attending Lehigh University’s Urban Principals Academy at Lehigh (U*PAL)U*PAL program in Allentown, Pennsylvania. U*PAL also begins in the summer.

Finally on the recruitment front we have been working closely with the leadership at Dominican University in suburban River Forest, Illinois, to identify and recruit a 2015 class of students for a Dominican Masters Degree in School Leadership.

In the month of April, 2015 we will complete the enhancement of both the presentation and the depth of content on our website.

On the liability side of the balance sheet we are in advanced stages of discussion with two strategic institutional investors. Each of them is weighing an investment of $500,000 into
EEI. Both are leaders in their respective fields. EEI would benefit greatly from an association with each of these institutions.

While we pursue potential institutional investors we have continued to meet current funding needs with add-on investments from previous investors as well as several new individual investors.

On the national policy front, former Indiana Governor now President of Purdue University,
Mitch Daniels recently testified to the US House Committee on Higher Education on his support for the concept of equity-based student financial aid. He is the highest ranking academic official to support this idea to date. We are pleased with his endorsement and hope to discuss possible opportunities with him at the ASU + GSV Educational Summit in Arizona , this April 6-8.