Judging from the future, not the past, Stride is taking action to shake up student finances – TechCrunch
If you’re trying to get a mortgage or a car loan, the banks will put on their judgment glasses and look at your past. Logic; this is a pretty good indicator of whether you will be able to repay your loans or not. Student funding is a little different. Of course, your past plays a role, but for many studies, having a degree dramatically changes your earning potential, and therefore your ability to repay. With a philosophy that today’s student loan systems perpetuate the systems of the richer-and-richer, Stride Funding takes a different approach and just raised $ 12 million to help it take a few more steps in the bank. to come up.
The issue at the heart of the business is that of equality and access to education – one of the most significant indicators of whether someone will have an opportunity for upward financial mobility. As you might expect, there are layers of privilege (can your parents help you pay off your loans) and – more specifically – institutionalized racism in the picture. It is with chimerical optimism that Stride Funding tackles the $ 130 billion student loan industry, which currently has $ 1.6 trillion in outstanding loans.
Since the closing of its roundtable in 2019, Stride has increased the capital committed to students to more than $ 50 million, with capital providers such as Silicon Valley Bank seeking to fund hundreds of millions of additional funds. The main objective of the company is to make education more accessible. , in particular to populations who have traditionally struggled to obtain funding.
“Especially in the area of student loans, there is a huge gap in terms of access to capital,” says Tess Michaels, CEO and founder of Stride Capital. “92% of private loans require co-signers, and less than a quarter of students actually have access to them. “
The company today announced that it has closed a $ 12 million Series A financing led by Firework Ventures (co-founded by Brigette Lau and Ashley Bittner). Other investors include impact investors such as Juvo Ventures and Graham Holdings, alongside previous investors GSV Ventures, Slow Ventures and Sinai Ventures. The Stride Funding team has a personal mission at the heart of its activity:
“Both of my parents immigrated here to the United States and education was their path to economic mobility. Education is what opens doors. And unfortunately, for many historical reasons, I think a lot of people, especially under-represented populations, are just being left out of the market, ”says Michaels, noting how this difference further amplifies the gap between the haves and have-nots. “I feel very connected to the mission. We have supported such a wide range of really, really amazing and inspiring students, from refugees and DACA students, to women, underrepresented minorities and more. We constantly receive encouraging stories from students, and this only reinforces that this is something worth doing. “