Student Loan Startup Tackling COVID-19 Crisis Raises $6 Million Series A
Savi, the social impact technology startup working to help solve the student loan crisis, today announced the close of a $6 million Series A investment round. Savi helps student loan borrowers navigate a confusing landscape of repayment and loan forgiveness options, serving more than 30,000 borrowers by finding more than $200 million in projected forgiveness.
Working with a coalition of student borrower advocates like Student Debt Crisis, Savi launched a free online COVID-19 Student Loan Aid Tool (crisishelp.bysavi.com) to help people laid off or whose income has been reduced as a result of the crisis. More than 10,000 borrowers explored the tool in the first 24 hours.
Series A funding was led by Nyca Partners, a leading fintech venture capital firm, with participation from AlleyCorp, Temerity Capital, and 9Yards Capital. Series A was also supported by social impact investors and entrepreneurs Michele Kang, Catherine Reynolds and Sheila Lirio Marcelo, Founder and former CEO of Care.com.
Over 46 million Americans currently hold student loan debt, according to the U.S. Department of Education, totaling more than $1.5 trillion. The vast majority of borrowers waste time applying for the wrong type of loan relief, give up trying or are misled into loan consolidation options that cost them more over time. The Congressional Budget Office projects in a new report that the government will issue an additional $1 trillion in new debt over the next decade with over $207 billion in projected loan forgiveness.
“With COVID-19 putting unprecedented strain on Americans, millions of people need immediate relief on their student loan debt — and navigating loan forgiveness and new repayment options is way more difficult than it should be ,” said Savi co-founder Aaron Smith. “Savi is a unique tech-driven solution, immediately unlocking available options for borrowers who are looking for guidance on student loan debt reduction. As a Public Benefit Corporation, we are proud of the support we are attracting from investors who want to have real social impact, while serving an enormous market with an innovative solution.”
“A growing number of Americans are looking for help managing their student loan debt, which has been increasing at an astounding rate over the past decade,” said Hans Morris, Managing Partner at Nyca. “Savi’s tools, backed by deep industry knowledge and cutting-edge technology, will help make this mountain of debt as manageable as possible. This new round of funding will enable Savi to reach more holders of student loan debt and continue improving their lives.”
“For nurses and doctors on the front line of the COVID-19 crisis, the last thing they should have to worry about is student loans. Savi gives employers like Boston Medical Center and organizations like the National Education Association, the country’s largest teacher union, an innovative new benefit for the real challenges their employees, members and customers are facing, “ said Tobin Van Ostern, Savi co-founder. “For people who lose their job, being able to pause their loan payments can provide important financial relief. With this new round of funding we can meet the tremendous demand from student borrowers affiliated with our partner organizations.”
