In January, Comcast Ventures led a $20M financing round for College Ave Student Loans, a company created to simplify the college loans process. I sat down with Joe DePaulo, co-founder, chairman, and CEO of College Ave Student Loans at their offices in Wilmington, Delaware to hear about the student-lending space, their experience working with us and the future of the marketplace.
Dave Zilberman: As an experienced executive in the financial services arena, why did you start College Ave Student Loans?
Joe DePaulo: We saw an industry dominated by four banks where customers had few product options and a sub-par experience. We knew we could build a franchise that took advantage of those weaknesses.
DZ: What are some of the complexities of the student lending space that make the user experience unique?
JDP: Student loans are unsecured loans that might look like a credit card on the surface. Unlike credit cards, each student loan often has two borrowers (typically the student with a parent), multiple loan disbursements that are months apart, and the money is disbursed directly to the school, most of whom have specific, unique processing requirements.
DZ: What’s the future of the student-lending marketplace?
JDP: I expect more entrants given that College Ave is the only scale player to enter since the crisis. There is a high barrier to entry in the in-school market though due to the inherent complexities mentioned before, including multiple borrowers, separate disbursements, and heavy school integration.
For more information on College Ave Student Loans, visit their site here.