The student lender Mpower has ceased operations following the impact of new immigration policies. According to a Bloomberg report, the company faced significant instability after the White House implemented a travel ban in 2025 that included Zimbabwe, a key market for the firm's loan portfolio.
Mpower operated by utilizing warehouse financing to issue student loans, which were subsequently bundled into asset-backed securities for sale to money managers. Demand for these securities declined sharply after the travel ban took effect, which restricted the company's ability to issue new credit.
The firm attempted to find a buyer but failed to secure a deal. Mpower has since reduced its workforce, including the departure of founder and CEO Manu Smadja, and informed equity investors that their holdings are likely to be wiped out.
Currently, Mpower holds over $400 million in outstanding asset-backed securities and is negotiating with creditors regarding the status of its remaining assets. The company's website states that it has reached its funding capacity and cannot provide new loans for 2026.
