SmartiFi Plans To Revolutionize The Student Loan Process
A rising tide of Americans are turning their backs on the idea that college is “worth it”. Despite plenty of statistics finding increases in lifetime income levels, social stratification, and general happiness levels associated with graduating college, I get it.
For many college graduates, the timeline from high school to full-time career looks like this:
- Optimistically choose a major based on a general interest they have in high school
- Take out expensive loans to finance their pursuit of this major
- At some point, realize that they either aren’t as passionate about their major as they hoped, or that what they really want to do with that major — what they are passionate about — doesn’t earn enough money
- Enter the workforce and dive into a career that doesn’t give them purpose, to afford enormous monthly payments on loans they took out to finance this “dream”
This model is ridiculous.
Enter SmartiFi. We are a very early stage startup building out of the Spartan Blockchain Solutions incubator at Michigan State University. We’re on a mission to:
- Get students loans they can afford
- From lenders that care about their success, instead of a faceless bank whose sole focus is ROI
- So they can graduate and pursue their passions rather than pure profit
So, how do we do this?
How it works
Our model is deceptively simple: Give alumni a platform to lend to students attending the alumni’s alma mater.
Right now, generous alumni make sizable recurring donations to universities, which, despite tax deductions, still result in losses (even getting back $8,000 from a $10,000 donation leaves your wallet $2,000 lighter). Instead, we are building a platform that lets alumni issue loans at low rates directly to students. This lets alumni drive direct, immediate impact with their money, while making college more affordable for students and earn a return.
The loan process
Once an alum joins the platform, we give them access to open loan applications from students attending their alma mater, and the alum becomes a lender. SmartiFi has already set the loan terms and verified the applicant’s information and enrollment. All that’s left for the lender is to decide if they want to fund the loan at the given amount and interest rates.
If they choose, the lender can provide the loan at a lower interest rate than the rate suggested by our platform. Once the lender issues a loan, the servicing is handled by our loan servicing partner. Finally, the lender walks away with a) recurring monthly income from that loan and b) the knowledge that they just helped a student afford food, rent, books, and classes with their loan.
In short, we’re working to give alumni a way to directly support students.
The team behind it
Myself and my colleague, Chris Nosowsky, are building this along with support from Kiinga Kioi, a Spartan Blockchain Solutions analyst,as well as the entire SBS organization. We’ve been fortunate enough to gain outside advisers with years of experience in venture capital, financial aid, community lending, and cloud computing to help guide our thinking around operations and product development.
Chris has done a lot of the work on the API endpoints, back-end infrastructure, UI components and the login/register system. Chris gave us his input on the current work he has had on this project, comparing it to some of his past internship and job experiences:
“The whole project so far has been an incredible experience and even some parts of it a big learning curve. What I love the most about it is the small team size, I can express my views to just a couple guys who are as passionate as I am about this project.”
While we will need to expand our team going forward, so far we’ve been able to stay small and nimble while we experiment, build our MVP, and run our first trials with a real client.
I have been on both sides of the board in that I have taken the traditional corporate summer/winter internship positions. I know what it is like to work with teams of over twenty people. There are a lot of differences when it comes to software development and the overall project road map.
Chris has been the developer on this project, and that responsibility can be both freeing and stressful:
You are the code reviewer, you are the tester. While the freedom is nice, this also puts a lot of weight on your shoulders. You are responsible for anything that breaks. While this has not been an issue so far, it can become stressful not having multiple other developers backing you up. At the same time, you push your own code, never having to worry about merging conflicts from other developers.
But despite the change in hierarchy and structure,
There are still many similarities. We are still working with an Agile mindset, being able to prioritize what needs to be done by the end of the week/sprint, carry-over to the next week need be. Parker has done an incredible job in defining those goals. I would also say the skillset is highly correlated. This is a browser-specific platform, so common languages like HTML, CSS, Javascript, Typescript, Node, Express and Angular are all needed skills for this project and used in my past internships.
After about three months of development,
I am very satisfied at where we are at in the project. To think about how far we have come since the beginning of this year is amazing. We have our MVP built and the next step is to keep building out the nice-to-have features on the platform along with any styling needed. We all respect each other’s time. We are all college students, so we all know how busy and stressful it can get. Overall, I am excited at where we are at and I cannot wait for what is to come.
What’s next
Right now we have the bones of the platform built out, and are working with a local client on a specialized deployment of the software. It’s thrilling to see how this has morphed from idea to a concrete business. We’re small, we’re starting in a niche, but our goal is to use the success of this early trial to prove out our model and sign on our first early adopter customers.
And, at the end of the day, we’re passionate about building something that genuinely helps people.
To contact us and learn more, get involved, or just chat, email us at hello[@]smartifi.co
