Startups Solving the Student Loan Debt Crisis
The Big Picture
This week, GOP prez hopeful Marco Rubio was beating the vocational school drum and chanting the mantra: “Welders make more money than philosophers.” Well…that’s debatable. Here’s what we do know. Majors of any kind — from philosophy to mechanical engineering to biochemistry to astrophysics to French — have student debt to the tune of $30,000 on average. That’s a crisis that translates to a total of $1.3 trillion, up 70% since 2009.
SoFi, a student loan consolidation and refinancing startup, recently announced that it raised $1 billion in its Series E funding led by Softbank. That’s one of the largest rounds ever in FinTech. Online platform Gradible assigns a user tasks like posting to Facebook or Craigslist or writing blogs in exchange for money ($10-$15 per hour on average) that’s applied directly to their student loan debt. And Gradifi and Tuition.io are targeting employers with student loan contribution benefit packages that boost their talent recruitment strategies.
That’s What He Said
“Today’s issue is really the Millennials saying retirement is great, but my take-home pay is $3,000 a month, and I spend $600 on student loans.” — Tim DeMello, CEO of Gradifi, which has about 100 companies using its platform to help pay down the student debt of its employees
About 43 million Americans are on the hook for their student loans, so the market is ripe and ready for startups with new solutions. Also, keep an eye on the more active role employers take in addressing this crisis.
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If you’re in Atlanta on November 18th, get yourself to Technori, an event that gathers founders, tech enthusiasts and investors. The evening includes a keynote by Carvana founder & CEO Ernie Garcia, and Startup Takeaway readers get 50% off their tickets. Just use promo code TK at checkout.
Originally published at start-opia.com on November 13, 2015.