A US lender specializing in loans to international students has largely shuttered its operations after losing access to fresh financing, marking one of the most significant corporate collapses triggered by the Trump administration’s immigration crackdown.

The firm, Mpower Financing, had come to rely heavily on borrowers from several African nations, particularly Zimbabwe — a country that the administration added last year to a partial travel-ban list. A person with direct knowledge of Mpower’s lending strategy said the concentration of loans to Zimbabwean students had grown beyond what the company intended, leaving it especially vulnerable to the policy shift.

Mpower’s business model essentially consisted of tapping so-called warehouse financing, including a credit line from Deutsche Bank AG, to fund student loans before bundling them into asset-backed securities sold to money managers. The proceeds were used to repay the facilities and free up capacity for new lending.

When demand for its ABS dried up earlier this year after the restrictions took effect, the funding cycle broke down, sharply limiting Mpower’s ability to make new loans, according to an investor letter seen by Bloomberg. Efforts to sell the company around the same time also failed.

After cutting most of its employees, including founder and Chief Executive Officer Manu Smadja, Mpower last month canceled its quarterly shareholder call and warned equity investors they were likely to be wiped out. The company has more than $400 million of outstanding ABS, and is now in talks with creditors over what happens to its remaining assets and operations, according to the letter.

The policy changes “severely limit the total addressable market of students the company can serve, the company’s willingness to lend based on post-graduation creditworthiness and third parties’ willingness to provide the capital necessary for the company to make those loans,” Mpower Chief Legal Officer James Breheny wrote in the letter. A skeleton staff continues to handle remaining contractual, regulatory and administrative obligations, he added.

Mpower didn’t respond to requests for comment, while Deutsche Bank declined to comment. Smadja didn’t reply to a message seeking comment.

After launching in 2014, Mpower grew to more than 25,000 borrowers across over 150 countries, fueled in part by its repeated use of the ABS market for funding. But the growth masked financial strain, including a cash crunch that prompted rescue funding from owners Tilden Park Capital Management and King Street Capital Management early last year. Still, it was able to securitize more than $300 million of student loans just months later.

The company hadn’t planned to become so exposed to one relatively small market, but its focus on borrowers from Africa was deliberate, said the person familiar with Mpower’s lending strategy, who asked not to be identified because they’re not authorized to speak publicly.

That was partly because competing for Indian and Chinese students, who make up the bulk of international enrollment, was more expensive. To cut down on costs, the company turned to “student ambassadors,” some of whom had sizable social-media followings in Zimbabwe, to encourage prospective borrowers to finance their studies through Mpower, the person said.

A March provisional credit rating report from Morningstar DBRS showed that over a third of the loans in a proposed ABS being led by Goldman Sachs Group Inc. that was never sold were from borrowers from the African nation. That compares to 13% in a 2025 deal and less than 5% in a 2024 securitization.

For more ABS coverage, to the Structured Finance Weekly A few months later, Deutsche Bank sought to revive the deal, only to be met with investor concerns over the collateral and geographic concentration of the loans, according to people familiar with the matter. The transaction fell through again.

“The company historically relied on securitizations and other financing sources to generate liquidity, recycle capital, and support continued student loan originations,” the letter to shareholders said. “The inability to complete the proposed securitization transactions materially constrained the company’s liquidity and its ability to continue originating student loans.”In April, Mpower laid off more than half of its employees. By July, Smadja, the CEO, as well as the company’s chief financial officer were let go, along with much of the remaining staff. An audit was conducted to assess whether the company had sufficient financial resources to continue operating, the people familiar said.

Deutsche Bank ultimately terminated the credit line Mpower was using to help fund its lending after a financial covenant was breached, the people added, and the company stopped originating new loans.

Mpower, now majority owned by Tilden Park and King Street after the financial lifeline they provided last year left them with an 85% stake, is deciding what to do with what remains of the business. Representatives for the investment firms declined to comment.

Breheny, the chief legal officer, said in the letter that the company is in talks with secured lenders over what happens to its remaining assets, with possible outcomes including a negotiated transfer or creditor seizure. Either way, he said he doesn’t expect shareholders to receive anything.