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Borrower Bee

Meet 6 startups tackling the student loan crisis

In 2010, British students launched a series of massive demonstrations (and occasional riots) in response to a proposed increase in tuition fee caps to £9,000. It’s a reaction near incomprehensible to their American counterparts, who face an average tuition of $30,000 per year at private colleges – most of it financed through federal and private loans.

Some economists predict the US student loan situation has all the makings of another subprime mortgage crisis, and entrepreneurs are actually paying kids not to attend college. Clearly the time is right for startups to take advantage of these intimations of doom. Meet six companies trying to change the way college is financed.

commonbond

The Bonds That Tie

New York’s CommonBond is probably the best-known startup trying to change the student loans system – not least because they managed to raise a cool $100 million dollars in 2013. We spoke with the founders of CommonBond in depth earlier this year – check out our interview here.

pave

Indentured Education

Pave offers investors the chance to put their money in promising students rather than a stock portfolio. Program enrolees promise a percentage of their future earnings to their backers. In addition, Pave users typically benefit from mentorship from their investors.

givecollege

Share the Wealth

The San Diego-based GiveCollege not only offers families a financial planning tracker for college costs, but also provides a platform where community and corporate sponsors can help contribute to an individual child’s tuition. The site targets parents more than students, with the average age of beneficiaries trending toward the toddler years.

upstart

Start Me Up

The Upstart platform operates much like Pave, allowing older executives to support college students as both mentors and money-lenders. Founded by ex-Googler David Girouard, Upstart launched in 2012 and extends loans of up to $25,000.

zerobound

Good Graft

New York’s Zero Bound allows students to pay down their loan debt through doing good. Students and graduates set up a campaign page on the site, volunteering their time and skills to nonprofits that partner with the platform. Still in beta, the company plans to launch in earnest later this year.

tuition.io

Loan Sparks

Though Santa Monica’s Tuition.io isn’t offering a new model for repaying that college debt, the startup does promise a free, easy way for debtors to manage and organize their student loan payments. Tuition.io also offers a one-stop guide through the often-baffling world of consolidation, deferment, and forbearance.

If you’re in need of help with your own loans, Lifehacker has an excellent primer on handling your debt here.

Now go forth (and pay it off).

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